Seattle Bubblehttp://seattlebubble.com/blog
local real estate news, statistics, and commentary without the sales spin.Sat, 01 Aug 2015 00:48:10 +0000en-UShourly1SeattleBubblehttps://feedburner.google.com(Re) Introducing the Seattle Bubble Forumshttp://feedproxy.google.com/~r/SeattleBubble/~3/BoZk5kGkyFs/
http://seattlebubble.com/blog/2015/07/31/re-introducing-the-seattle-bubble-forums/#commentsSat, 01 Aug 2015 00:40:54 +0000http://seattlebubble.com/blog/?p=102931I am happy to announce that after suffering years of neglect and disarray, the Seattle Bubble Forums are back and better than ever. With visits and comments here heating up as the market rises further and further into new bubble territory, I decided it was time to put in the work to bring our old […]

]]>I am happy to announce that after suffering years of neglect and disarray, the Seattle Bubble Forums are back and better than ever.

With visits and comments here heating up as the market rises further and further into new bubble territory, I decided it was time to put in the work to bring our old forums back from the grave.

To get to the new forums just click the “Forum” link at the top of the page.

Although I have migrated everything over to an entirely new platform, all of the old 2007-2013 content is still there. If you created an account on the old forum you should still have an account on the new forum. If you don’t have an account, creating one is free and easy. All you have to do is verify your email address (your email will not be visible to other users).

With these new forums fully integrated into the site we’ll be able to host a much broader range of discussions between visitors. You also get often-requested features like an “ignore user” function as well as private user-to-user messaging.

This post will be closed to comments on the blog. If you have a comment about the forums, take ten seconds to register an account over there and leave your comment in the forums themselves. If you have trouble creating an account, drop me a line directly.

I will also be ending the weekly “open thread” since the forums are one giant 24/7 open thread.

]]>http://seattlebubble.com/blog/2015/07/31/re-introducing-the-seattle-bubble-forums/feed/0http://seattlebubble.com/blog/2015/07/31/re-introducing-the-seattle-bubble-forums/Case-Shiller Tiers: Strong But Slowing Monthly Gainshttp://feedproxy.google.com/~r/SeattleBubble/~3/HFJvOtSDlkY/
http://seattlebubble.com/blog/2015/07/29/case-shiller-tiers-strong-but-slowing-monthly-gains/#commentsWed, 29 Jul 2015 15:41:59 +0000http://seattlebubble.com/blog/?p=102910Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties. Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details […]

]]>Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

Low Tier: < $296,017 (up 1.5%)

Mid Tier: $296,017 – $471,764

Hi Tier: > $471,764 (up 1.4%)

First up is the straight graph of the index from January 2000 through May 2015.

Here’s a zoom-in, showing just the last year:

All three tiers were up month-over-month again in May, but with smaller gains across the board than we saw between March and April.

Between April and May, the low tier increased 1.1 percent, the middle tier rose 1.9 percent, and the high tier gained 1.1 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through May 2015.

Year-over-year price growth shrank slightly in the high and low tiers, but grew in the middle tier. Here’s where the tiers sit YOY as of May – Low: +10.3 percent, Med: +7.8 percent, Hi: +6.7 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 15.0 percent off peak for the low tier, 8.5 percent off peak for the middle tier, and 2.7 percent off peak for the high tier.

]]>http://seattlebubble.com/blog/2015/07/29/case-shiller-tiers-strong-but-slowing-monthly-gains/feed/24http://seattlebubble.com/blog/2015/07/29/case-shiller-tiers-strong-but-slowing-monthly-gains/Case-Shiller: More Strong Price Gains in Mayhttp://feedproxy.google.com/~r/SeattleBubble/~3/nDMH5RAbg0k/
http://seattlebubble.com/blog/2015/07/28/case-shiller-more-strong-price-gains-in-may/#commentsTue, 28 Jul 2015 19:46:55 +0000http://seattlebubble.com/blog/?p=102901Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to April data, Seattle-area home prices were: Up 1.4% April to May Up 7.4% YOY. Down 6.1% from the July 2007 peak Last year at this time prices rose 1.4% month-over-month and year-over-year prices were up 9.3%. The Seattle area’s […]

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the ninety-four months since the price peak in Seattle prices are down 6.1%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of May 2015, Seattle prices are approximately where they were in July 2006.

]]>http://seattlebubble.com/blog/2015/07/28/case-shiller-more-strong-price-gains-in-may/feed/2http://seattlebubble.com/blog/2015/07/28/case-shiller-more-strong-price-gains-in-may/Scammy Real Estate Ads Back in Forcehttp://feedproxy.google.com/~r/SeattleBubble/~3/V0KGhJ-b0Yw/
http://seattlebubble.com/blog/2015/07/27/scammy-real-estate-ads-back-in-force/#commentsMon, 27 Jul 2015 15:51:04 +0000http://seattlebubble.com/blog/?p=30975Here’s yet another sign that we’re back in bubble territory, albeit a strictly anecdotal one. During the last bubble it was nearly impossible to turn on the radio without hearing some form of scammy “riches in flipping” ad during the commercial break. I don’t listen to the radio that often, but in the rare instances […]

]]>Here’s yet another sign that we’re back in bubble territory, albeit a strictly anecdotal one.

During the last bubble it was nearly impossible to turn on the radio without hearing some form of scammy “riches in flipping” ad during the commercial break. I don’t listen to the radio that often, but in the rare instances that I do tune in recently I’ve been hearing a lot more of that same kind of garbage. For example, I’ve heard this one on KIRO more than a few times lately:

How would you like to make some serious cash flipping houses in your area?

Hi, I’m [censored], founder of the [censored] Real Estate Academy. Over the last few years my elite team of committed house flippers has been using my three step “Fortunes in Flipping” system to buy and sell properties for quick profits and long term financial gains.

Now it’s your turn to have the same investor success. For a limited time I will send anyone that calls a free copy of my “Fortunes in Flipping” kit that will show you how easy it is to get in, get out, and get paid! There’s no catch, I even pay the shipping cost.

In my free kit I eliminate all the guesswork and I break down the process for evaluating properties for a quick turn and instant profit and I show you how to access some very unique financing programs to finance your deals.

If you dig around online you’ll find that this particular scammer lures you in with the free seminar then tries to take you for a few thousand bucks for his three-day seminar. At the three-day seminar his slick salespeople will attempt to soak you for upwards of $30,000 to buy into his “system.” Oh, and the “very unique financing programs” apparently include financing real estate purchases on credit cards.

]]>http://seattlebubble.com/blog/2015/07/27/scammy-real-estate-ads-back-in-force/feed/25http://seattlebubble.com/blog/2015/07/27/scammy-real-estate-ads-back-in-force/Price to Income Ratio Back in Bubble Territoryhttp://feedproxy.google.com/~r/SeattleBubble/~3/dAXzgdkDooQ/
http://seattlebubble.com/blog/2015/07/24/price-to-income-ratio-back-in-bubble-territory/#commentsFri, 24 Jul 2015 18:35:56 +0000http://seattlebubble.com/blog/?p=30958It has been a while since we last looked at one of our primary housing bubble metrics: local home prices compared to incomes. In the next chart I am using the Case-Shiller Home Price Index for the Seattle area (which rolls together King, Snohomish, and Pierce counties) and Bureau of Economic Analysis data on per […]

]]>It has been a while since we last looked at one of our primary housing bubble metrics: local home prices compared to incomes.

In the next chart I am using the Case-Shiller Home Price Index for the Seattle area (which rolls together King, Snohomish, and Pierce counties) and Bureau of Economic Analysis data on per capita incomes for the same three-county metro area.

Here’s a look at the home price to income ratio over the last 24 years:

By this metric, the last housing bubble lasted from about mid-2004 when the ratio hit 7.4 through mid-2007 when it peaked at 9.2. The current level of 7.6 is definitely in bubble territory, in my opinion. This chart does show another way that this (possible) bubble is different from the last: From 2004 through mid-2006, the price-to-income ratio shot straight up—32 months without a single month-over-month dip. This time around we’re seeing consistent seasonality, with the index decreasing slightly in the fall and winter each year.

In June the price-to-income ratio hit its highest level since December 2008.

Let’s take a look at a variation of this measure, using King County median home price from the NWMLS and BEA per capita income for just King County.

The overall pattern in King County is the same as for the whole Seattle metro area, but the current level is much higher relative to the past. While the Seattle metro price-to-income ratio is currently 17 percent below its 2007 peak, the King County price-to-income ratio is only 7 percent below its peak—well into bubble territory without question.

Here’s another way of looking at the same data by just plotting each index next to each other. Note that the most recent income data is for 2012, so the 2013 and 2014 data is just a linear projection of the 2009-2012 trend. I’ve also added the faded line for the “flat incomes” scenario, as well as a line for median household income, which has not tracked with home prices since the late ’90s.

As of June, the Seattle area’s Case-Shiller home price index is 17.3 percent above the per capita income index. This is the largest difference since December 2008, and roughly the same difference that we saw in November 2004 on the way up during the last bubble.

]]>http://seattlebubble.com/blog/2015/07/24/price-to-income-ratio-back-in-bubble-territory/feed/64http://seattlebubble.com/blog/2015/07/24/price-to-income-ratio-back-in-bubble-territory/Seattle-Area Unemployment Dips to Previous Boom Levelshttp://feedproxy.google.com/~r/SeattleBubble/~3/bKF754uoAn0/
http://seattlebubble.com/blog/2015/07/22/seattle-area-unemployment-dips-to-previous-boom-levels/#commentsWed, 22 Jul 2015 19:53:51 +0000http://seattlebubble.com/blog/?p=30941We haven’t taken a look at the jobs data in a while, so lets update those charts through June. In this series we look at how the Seattle area’s unemployment rate and approximate labor participation rate stack up to the national numbers. [July 24 Update – The chart above and numbers below have been updated […]

]]>We haven’t taken a look at the jobs data in a while, so lets update those charts through June. In this series we look at how the Seattle area’s unemployment rate and approximate labor participation rate stack up to the national numbers.

[July 24 Update – The chart above and numbers below have been updated to reflect Seattle-area participation rates using total OFM population counts for ages 15 and up. Note that the BLS population counts for labor participation are for the “civilian noninstitution” population ages 16 and up, so the national and local numbers are not perfectly comparable.]

In June the Seattle-Bellevue-Everett metro area saw the unemployment rate fall below 4 percent for the first time since April 2008. The national level of 5.3 percent was also roughly on-par with where it was at in early 2008.

The Seattle-area labor participation rate* keeps bouncing around the 68 to 69 percent range that it has been at since 2010. The national labor force participation rate continues to bump along in the same area it has been since early 2014 at around 62 percent.

For reference, in 2006 when everyone imagined the economy to be in great health, the local unemployment rate averaged 4.3% and the labor participation rate averaged 68.3%. In other words, in terms of employment and participation, the Seattle area economy is currently in comparable shape to where it was at the peak of the last boom.

Here’s a look at the local and national unemployment rates with Washington’s statewide rate thrown in as well.

Washington as a whole has the same unemployment rate as the nation at 5.3 percent.

*Note: Posts in this series prior to 2015 overstated the Seattle-area labor participation rate due to an incomplete population count in my calculations. This has been corrected in the historic data above.

]]>http://seattlebubble.com/blog/2015/07/22/seattle-area-unemployment-dips-to-previous-boom-levels/feed/24http://seattlebubble.com/blog/2015/07/22/seattle-area-unemployment-dips-to-previous-boom-levels/Despite Red-Hot Housing Market, One in Five Pending Sales Still Fail to Closehttp://feedproxy.google.com/~r/SeattleBubble/~3/94M_NpOaaYQ/
http://seattlebubble.com/blog/2015/07/20/despite-red-hot-housing-market-one-in-five-pending-sales-still-fail-to-close/#commentsMon, 20 Jul 2015 17:36:18 +0000http://seattlebubble.com/blog/?p=30933With another quarter fully in the books, let’s take a look a the latest data on pending sales volume versus closed sales volume. For this series I roll the pending sales and closed sales data up by quarter, with pending sales offset by one month. In other words, the second quarter numbers below represent pending […]

]]>With another quarter fully in the books, let’s take a look a the latest data on pending sales volume versus closed sales volume.

For this series I roll the pending sales and closed sales data up by quarter, with pending sales offset by one month. In other words, the second quarter numbers below represent pending sales from March, April, and May and closed sales from April, May, and June.

After dropping in Q4 to a level near its lowest point since the NWMLS’s redefinition of “pending” in July 2008, the gap between pending sales and following month closed sales grew in Q1 and Q2. This is not surprising though, since typically the first and second quarter of the year see a slightly larger gap than the third and fourth quarters.

The fact that one in five pending sales don’t appear to be closing even in this ridiculously overheated market is the one silver lining for home buyers out there today. Even if you lost the bidding war on the “home of your dreams,” keep a close eye on the home because there’s a chance it might be back…

]]>http://seattlebubble.com/blog/2015/07/20/despite-red-hot-housing-market-one-in-five-pending-sales-still-fail-to-close/feed/28http://seattlebubble.com/blog/2015/07/20/despite-red-hot-housing-market-one-in-five-pending-sales-still-fail-to-close/Sales Mix Shifted Into Expensive Eastside Homes in Junehttp://feedproxy.google.com/~r/SeattleBubble/~3/5xI542H2smg/
http://seattlebubble.com/blog/2015/07/17/sales-mix-shifted-into-expensive-eastside-homes-in-june/#commentsFri, 17 Jul 2015 15:52:42 +0000http://seattlebubble.com/blog/?p=30920With the big increase in the county-wide median price between May and June, let’s take an updated look at how King County’s sales are shifting between the different regions around the county. This data is interesting to keep tabs on since geographic shifts can and do affect the median price. In order to explore this […]

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

All three tiers saw month-over-month gains in their respective median-median price, but none are quite at record levels. The middle tier hit an all-time high in April, and the high tier hit its all-time high in December. The low tier still hasn’t beat its 2007 high. Month-over-month, the median price in the low tier rose 6.8 percent, the middle tier increased 5.2 percent, and the high tier gained 0.8 percent.

Twenty-eight of the twenty-nine NWMLS regions in King County with single-family home sales in June had a higher median price than a year ago, while sixteen had a month-over-month increase in the median price.

Next up, the percentage of each month’s closed sales that took place in each of the three regions.

Sales in all three regions rose again between May and June, while month-to-month the mix shifted slightly away from the South King low tier and into the Eastside high tier region. Month-over-month sales were up 2.1 percent in the low tier, up 3.8 percent in the middle tier, and up 20.2 percent in the high tier.

Year-over-year sales increased in all three tiers as well. Compared to a year ago, sales increased 17.3 percent in the low tier, rose 11.8 percent in the middle tier, and increased 23.4 percent in the high tier.

As of June 2015, 32.2 percent of sales were in the low end regions (flat from 32.2 percent a year ago), 34.0 percent in the mid range (up just slightly from 35.7 percent a year ago), and 33.8 percent in the high end (up from 32.1 percent a year ago).

Here’s that information in a visual format:

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

Prices are rising in most parts of the Seattle area, but the sales mix shifted pretty strongly toward the more expensive parts of the county in June. This shift is likely a big part of why the county-wide median price shot up from $480,000 in May to $500,000 in June.

]]>http://seattlebubble.com/blog/2015/07/17/sales-mix-shifted-into-expensive-eastside-homes-in-june/feed/36http://seattlebubble.com/blog/2015/07/17/sales-mix-shifted-into-expensive-eastside-homes-in-june/Consumer Confidence Keeps Climbing, Rates Inching Uphttp://feedproxy.google.com/~r/SeattleBubble/~3/biUegbscUCs/
http://seattlebubble.com/blog/2015/07/15/consumer-confidence-keeps-climbing-rates-inching-up/#commentsWed, 15 Jul 2015 17:57:05 +0000http://seattlebubble.com/blog/?p=30914It’s been half a year since we last checked in on Consumer Confidence and mortgage interest rates, so let’s take a look at a long-overdue update to those charts. First up, here’s the Consumer Confidence data as of June: The overall Consumer Confidence Index currently sits at 101.4, up 7 percent in a month and […]

The overall Consumer Confidence Index currently sits at 101.4, up 7 percent in a month and up 17 percent from a year ago.

At 111.6, the Present Situation Index increased 4 percent between May and June, and is up 29 percent from a year earlier. The Present Situation Index is currently up 452 percent from its December 2009 low point, but still down 19 percent from its pre-bust peak in July 2007.

The Expectations Index also rose in June, up 10 percent from May, and is up from a year earlier by 10 percent.

As of last week, the 30-year mortgage rate was at 4.04 percent, up slightly from the 3.74% January through May average. Current interest rates are roughly on par with where they were in September 2011 and still nearly two and a half points below the 6.41 percent average rate during the height of the housing bubble through 2006.

You heard it from the Federal Reserve Chair herself: interest rates will soon go up.

In prepared testimony to the House Financial Services Committee on Wednesday, Federal Reserve Chair Janet Yellen will say that as the U.S. economy continues to improve, “conditions likely would make it appropriate at some point this year to raise the federal funds rate target.”

Click below for the interactive Consumer Confidence chart (only works in Google Chrome).

You can use the sliders under the interactive chart below to zoom in on the data for a specific period.

]]>http://seattlebubble.com/blog/2015/07/15/consumer-confidence-keeps-climbing-rates-inching-up/feed/104http://seattlebubble.com/blog/2015/07/15/consumer-confidence-keeps-climbing-rates-inching-up/Mayor’s Affordability Committee Releases Tepid Growth Recommendationshttp://feedproxy.google.com/~r/SeattleBubble/~3/N3316Qq86ac/
http://seattlebubble.com/blog/2015/07/13/mayors-affordability-committee-releases-tepid-growth-recommendations/#commentsMon, 13 Jul 2015 19:02:37 +0000http://seattlebubble.com/blog/?p=30906As a follow-up to this morning’s post about the future of single-family housing in Seattle, here’s the final report from the Mayor’s “Housing Affordability and Livability Advisory Committee”: Seattle Housing Affordability and Livability Agenda (pdf) There are a few relevant portions of the report that address single-family zoning. From page 21 of the report: MF.1 […]

There are a few relevant portions of the report that address single-family zoning.

From page 21 of the report:

MF.1 Increase the amount of land zoned for multifamily housing

The HALA Committee recommends devoting more land to multifamily housing especially in areas near amenities and services such as transit and schools. Any increase in development capacity should be tied to requirements for providing affordable housing.

There is a wide range of circumstances that present good opportunities to add or expand multifamily zoning in ways that complement neighborhoods, leverage existing resources and help the environment. New multifamily zoned land should be prioritized near green belts, open space and parks; near schools and community centers; and within walking distance of the frequent transit network. While an increase in multifamily zoned land to spur production of new multifamily housing is not expected to immediately decrease rents in the short-term, ensuring a growing supply of larger multifamily housing across the city can help to stem rent increases over the long-term. This strategy, which is expected to impact 6% of Seattle’s Single Family zones (3% in urban villages and 3% in the walksheds described above) should be viewed as an investment in Seattle’s overall housing market affordability for both current and future generations.

Strategies to preserve quality affordable multifamily housing and mitigate displacement must be a critical component of any plan for short- and long-term growth. There is risk of some increased displacement pressure in areas that are upzoned (that is, where zoning is changed to increase development capacity on a site). However, linking upzones directly to a requirement for affordable housing responds to some of the need that is fueled in part by growth. Additional strategies focused specifically on mitigating displacement will also be needed.

In my opinion, there’s no way that re-zoning just six percent of the land in Seattle that’s currently zoned for single-family is going to be sufficient for the kind of growth Seattle is expecting over the next few decades and is in fact already experiencing.

However, while the report doesn’t seem to be suggesting an actual re-zoning of most of Seattle’s single-family areas, it does recommend things like “increasing supply of accessory dwelling units” and “allow a broader mix of lower density housing types within single family areas.”

From page 24 of the report:

Increase Access, Diversity and Inclusion within Single Family Areas
Approximately 65% of Seattle’s land – not just its residential land but all its land – is zoned single family, severely constraining how much the City can increase housing supply. Among its peer cities, Seattle has one of the highest percentages of land dedicated exclusively to detached single family structures and a small number of accessory dwelling units. The exclusivity of Single Family Zones limits the type of housing available for sale or rent, limits the presence of smaller format housing and limits access for those with less income. Seattle’s zoning has roots in racial and class exclusion and remains among the largest obstacles to realizing the City’s goals for equity and affordability. In a city experiencing rapid growth and intense pressures on access to affordable housing, the historic level of Single Family zoning is no longer either realistic or sustainable.

SF.1 Increase Supply of Accessory Dwelling Units and Backyard CottagesSF.1a Remove Barriers Code Barriers to Accessory Dwelling Units and Backyard Cottages
Although both Accessory Dwelling Units and Backyard Cottages are allowed in Single Family zones, several of the associated land use regulations are deterring their production in significant quantities. Some of the land use code regulations that are in place function as a barrier for a homeowner to take on adding an accessory unit to their home. The same code barriers may not be providing a strong public policy benefit. Therefore, in order to boost production, the City should remove specific code barriers that make it difficult to build ADUs and DADUs:

Remove the parking requirement. Currently, an off-street parking space must be created for an additional ADU or DADU.

Remove the ownership requirement. Allow both the accessory and principal unit to be rented. Currently, the owner must live in one of the two. The ownership requirement is a barrier to securing financing to build an ADU/DADU. Explore the opportunities and implications of Unit Lot Subdivision which would allow separate ownership of the primary dwelling and the accessory dwelling.

Allow a single lot to have both an ADU and a DADU. Currently only one is allowed.

Make minor modifications to remove barriers within existing development standards for DADUs, such as height limits, setbacks, maximum square footage, and minimum lot size to ensure constructability.

Removing these barriers is expected to boost production of ADUs and DADUs to levels in the range of 5% or more of all single family lots within 10 years, which could produce 4,000 or more new homes.

SF.2 Allow a Broader Mix of Lower Density Housing Types within Single Family Areas
The City should allow more variety of housing scaled to fit within traditional single-family areas to increase the economic and demographic diversity of those who are able to live in these family oriented neighborhoods. The broader mix of housing would include small lot dwellings, cottages or courtyard housing, rowhouses, duplexes, triplexes, and stacked flats. Although a broader variety of housing would be permitted, the total amount of “massing” or building area on a single lot should remain the same (excluding ADUs and DADUs). This does not eliminate the option of single family housing; rather, it increases the opportunities for more efficient use of very limited land resources. The program could take the form of land use code changes, or it could begin as a pilot program with a limited time period and a maximum number of units.

SF.4 Oppose Neighborhood Conservation Districts
During 2015, a proposal to establish a Neighborhood Conservation District program was brought for Council consideration. The program would allow groups of property owners in single family areas and lowrise multifamily zoned areas to establish conservation design guidelines that would be specific to areas as small as a block or two. As proposed, the guidelines would limit architectural style of new development in those areas and the program would set up an additional review panel that would need to give approval before building permits could be issued for infill development or alterations. The HALA recommends that the City not establish a Neighborhood Conservation District program as currently proposed. Such a program could reduce the areas of the city available to increase housing supply and affordability, and is thus at cross purposes with other recommendations in this report. The program could make approvals for new housing more time consuming and expensive. The program could also be used to limit the diversification of lower density areas of the city by creating a new avenue for existing homeowners to oppose the addition of new infill housing in their neighborhoods.

Frankly the recommendations in this report seem pretty tepid to me. I have no doubt it will be met with extreme opposition by all the typical NIMBY groups, regardless.

]]>http://seattlebubble.com/blog/2015/07/13/mayors-affordability-committee-releases-tepid-growth-recommendations/feed/98http://seattlebubble.com/blog/2015/07/13/mayors-affordability-committee-releases-tepid-growth-recommendations/Seattle Preparing to Say Goodbye to Single-Family Zoning?http://feedproxy.google.com/~r/SeattleBubble/~3/B_TMQH5MxMU/
http://seattlebubble.com/blog/2015/07/13/seattle-preparing-to-say-goodbye-to-single-family-zoning/#commentsMon, 13 Jul 2015 17:24:07 +0000http://seattlebubble.com/blog/?p=30901Remember a few months ago, when I suggested that single-family housing in Seattle would be on its way out soon? If Seattle’s population keeps growing, there is a hard housing reality that we’re going to have to face: the death of the single-family home. As of 2013, roughly 43 percent of Seattle’s housing stock is […]

If Seattle’s population keeps growing, there is a hard housing reality that we’re going to have to face: the death of the single-family home.

As of 2013, roughly 43 percent of Seattle’s housing stock is made up of detached single-family homes. That’s already a minority, but if Seattle is going to be able to continue growing, that number is going to have to go a lot lower.

With 7,776 people per square mile, Seattle is currently the tenth most dense city in the country despite being only the twenty-second most populous. However, if Seattle is going to keep adding more people into the limited space we have available, we’re going to have to kiss an awful lot of our single-family housing goodbye.

Leaders of Seattle Mayor Ed Murray’s panel on housing affordability rushed Tuesday to temper the group’s position after a draft report surfaced that included a recommendation for doing away with single-family zoning.

But some city officials say the idea of opening up Seattle’s traditional neighborhoods to more development is worth discussing.

Councilmember Tom Rasmussen, one of the council’s staunchest neighborhood allies, says the panel’s draft recommendation wasn’t far-fetched, and Councilmember Mike O’Brien says such changes wouldn’t need to be very dramatic.

“We’ve heard that some members of the committee have been advocating for that for a long time,” Rasmussen said. “I’m not at all surprised it was included.”
…
In the recent draft of its recommendations, the committee argued for converting Seattle’s single-family zones into “low-density residential zones” allowing more types of housing, such as “small-lot dwellings, cottages or courtyard housing, duplexes and triplexes.”

Seattle Mayor Ed Murray’s housing-affordability task force won’t publicize its final recommendations until 11 a.m. Monday, but two City Council members have already lined up in support of a competing proposal.

Councilmembers Kshama Sawant and Nick Licata are scheduled to take part in an 11:30 a.m. news conference unveiling the alternative drawn up by Jon Grant.

I’m going to stand by my April assessment about the future of single-family housing in the city of Seattle:

Either Seattle’s population growth will dramatically slow down again in the near future, or we’re going to be tearing down a lot of single-family homes to make space for more townhomes and condos.

]]>http://seattlebubble.com/blog/2015/07/13/seattle-preparing-to-say-goodbye-to-single-family-zoning/feed/24http://seattlebubble.com/blog/2015/07/13/seattle-preparing-to-say-goodbye-to-single-family-zoning/KUOW Misses the Mark on Foreclosureshttp://feedproxy.google.com/~r/SeattleBubble/~3/QZyfQZit4-U/
http://seattlebubble.com/blog/2015/07/09/kuow-misses-the-mark-on-foreclosures/#commentsThu, 09 Jul 2015 18:22:38 +0000http://seattlebubble.com/blog/?p=30871KUOW ran a story a couple days ago that I would like to address here: Thousands Of Foreclosures Sit Off Market In Seattle Area The Seattle-area housing market could use an injection of inventory. It’s on a tear right now, fueled by high demand and low supply, and hooked on low-interest rates. And there is […]

The Seattle-area housing market could use an injection of inventory. It’s on a tear right now, fueled by high demand and low supply, and hooked on low-interest rates.

And there is a potential supply of lower-priced homes in the region. Those are the 4,300 foreclosed homes from Everett to Tacoma that are now owned by banks, according to RealtyTrac.

More than 4,000 houses added to the market would be a rush – that would be two-thirds of what the region sells in a single month.

But these houses are just sitting around.

There are a few big problems with this piece.

Problem 1: RealtyTrac data is misleading

KUOW’s report is based on data from RealtyTrac, and RealtyTrac overcounts foreclosures. When most people think of a “foreclosed home” they are usually talking about a home that has actually been repossessed by the bank and sits empty (i.e. a bank owned home). When RealtyTrac gives data on foreclosure counts, they’re giving a total number of homes that are in “some stage of foreclosure (default, auction or bank owned).”

Here in Washington State, there is no public notice of default, so RealtyTrac’s numbers only count “auction” (i.e. homes that are scheduled for a bank auction according to the publicly-filed Notice of Trustee Sale) and “bank owned” (i.e. homes that have actually been repossessed by the bank via a Trustee Deed). If you look at the Washington State foreclosure timeline, you’ll see that any given home progressing at the fastest possible rate through the foreclosure process is going to sit in one of those two states between day 90 and day 281. Therefore, RealtyTrac’s data is a snapshot of 191 days—over six months—of the foreclosure pipeline.

Any snapshot of the foreclosure pipeline at a given time that includes both homes that have received a notice of trustee sale and those that have actually been foreclosed will include the last four months’ worth of homes that received a notice of trustee sale and the last two months worth of trustee deeds. Running those numbers for King / Snohomish / Pierce gives us 3,087 notices of trustee sale March through June and 698 trustee deeds1 in May and June, for a total of 3,785 homes progressing normally through the foreclosure pipeline as of the end of June. Again, this number assumes every home is moving as quickly as possible through the pipeline, which we know is not true since there are many ways to delay and extend the foreclosure timeline.

In other words, 4,300 sounds about right for the number of homes progressing normally through the foreclosure pipeline right now. These homes are not “just sitting around,” as claimed by KUOW. In fact, more than 3,000 of them are not yet even bank owned, meaning they are likely still occupied by the delinquent borrowers.

Problem 2: 4,300 homes is a drop in the bucket

According to NWMLS data, there were 6,472 closed sales (SFH+condo) in King / Snohomish / Pierce in the month of June. At the end of the month there were 9,710 homes on the market. That gives us a mere 1.5 months of supply for the three-county metro area.

Even if we assume that the 4,300 homes cited by RealtyTrac are “just sitting around” (which they are not) and were able to be immediately added to the market, increasing inventory from 9,710 to 14,010 would result in an increase of just 0.7 months of supply. Granted, 2.2 months of supply is definitely better than 1.5, but keep in mind that six months of supply is considered a “balanced market” that favors neither buyers nor sellers. 2.2 months of supply is still deep in sellers’ market territory.

In order to bring the Seattle-area housing market back into balance at the current level of demand, an additional twenty-nine thousand homes would need to be listed for sale—nearly seven times the claimed 4,300 homes that are “just sitting around” (but aren’t really).

A Better Headline

Frankly, 4,300 homes in some stage of foreclosure in the Seattle metro area is not news. If KUOW really wanted to run a piece about it though, the headline should have been “Thousands Of Homes Progressing Normally Through The Foreclosure Process In Seattle Area”

Are there a few homes here and there sitting empty for longer than the typical foreclosure process for one reason or another? Sure. Is it “thousands of homes”? Nope, no way, not true, just no.

]]>http://seattlebubble.com/blog/2015/07/09/kuow-misses-the-mark-on-foreclosures/feed/35http://seattlebubble.com/blog/2015/07/09/kuow-misses-the-mark-on-foreclosures/June Reporting Roundup: “The balloon is growing”http://feedproxy.google.com/~r/SeattleBubble/~3/-euiFFgEIaQ/
http://seattlebubble.com/blog/2015/07/08/june-reporting-roundup-the-balloon-is-growing/#commentsWed, 08 Jul 2015 19:58:37 +0000http://seattlebubble.com/blog/?p=30867It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat). To kick things off, here’s an excerpt from the NWMLS press release: “First time […]

]]>It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.
…
“Kitsap house sales are hotter than a firecracker,” observed MLS director Frank Wilson, the branch managing broker and Kitsap district manager at John L. Scott Inc. in Poulsbo. “Despite heat, vacations and holidays the market has not slowed. We continue to see good open house traffic, low market times and multiple offer situations,” he stated.

Multiple offers are common throughout the Central Puget Sound region.

“We see many multiple offers on properties,” reported Dick Beeson, principal managing broker at RE/MAX Professionals in Tacoma, who described sales activity as “phenomenal.” For first-time buyers, the competitive bidding can be daunting, which he suggested underscores the importance of relying on experienced brokers. Anxious buyers have a sense of urgency as prices rise, he noted. “They need a great real estate broker to help guide them through multiple offer situations,” added Beeson, a member of the Northwest MLS board of directors.

“More and more buyers are starting to chase the market northward as prices increase in King County, especially around Seattle,” said Diedre Haines, principal managing broker-South Snohomish County at Coldwell Banker Bain in Lynwood. [sic]

Happy days are here again for used home salespeople. You can feel their excitement oozing through the press release with phrases like “hotter than a firecracker” and “diving right in.”

It’s great times for everyone… except the people out there actually trying to buy a home.

Read on for my take on this month’s local news reports.

Seattle Times

But real-estate experts say this market is different in a number of ways. Buyers now must leap over many more hurdles to qualify for a mortgage. Hiring at technology firms has expanded the region’s economic base. And a drought in listings that surfaced in 2013 has no end in sight.

“I wouldn’t say we’re in a bubble,” said Alan Pope, a real-estate appraiser in Redmond. “I would say the balloon is growing, and I can’t tell when it’s going to stop.”

Lennox Scott, CEO of John L. Scott Real Estate, said that over the long term, homes in the region appreciate 4 percent annually. Home prices lost so much ground during the past recession that the market today is just slightly above where it should be by that measure, he said.

Home salespeople declare current frenzy market not a bubble. Film at eleven.

Puget Sound Business Journal

Typically home-buying activity falls off during the summer months, but not this year in the metro Puget Sound region, where buyers are competing to buy fewer homes while paying significantly higher prices.
…
Real estate brokers say first-time buyers are fueling the market as tenants grow tired of paying ever-rising apartment rents. In addition, more people are moving to the region to fill a growing number of jobs. Across the state, non-farm employment rose by 7,700 positions from April to May, according to early estimates from the federal Bureau of Labor Statistics.

The Puget Sound Business Journal is relatively light on any commentary beyond the press release as well.

Tacoma News Tribune / The Olympian

Rolf Boone:

The South Sound housing market in June had just about everything an owner would ever want if they needed to sell.
…
But here’s the catch: Can anyone actually find a house to purchase?

That might be the question on the minds of many buyers, because even though the South Sound housing market continues to sizzle like the weather, inventory got a little tighter last month.

]]>http://seattlebubble.com/blog/2015/07/08/june-reporting-roundup-the-balloon-is-growing/feed/24http://seattlebubble.com/blog/2015/07/08/june-reporting-roundup-the-balloon-is-growing/King County Single Family Median Price Hits New Record at Half a Million Dollarshttp://feedproxy.google.com/~r/SeattleBubble/~3/JgGJ_gKAVAY/
http://seattlebubble.com/blog/2015/07/06/king-county-single-family-median-price-hits-new-record-at-half-a-million-dollars/#commentsMon, 06 Jul 2015 23:13:59 +0000http://seattlebubble.com/blog/?p=30854June market stats were published by the NWMLS today. Before we get into our monthly stats, here’s a quick look at their press release. Home sales sizzling around Western Washington, with volumes reaching 10-year high Temperatures around Western Washington were not the only thing sizzling during June. Northwest Multiple Listing Service members reported 11,453 pending […]

]]>June market stats were published by the NWMLS today. Before we get into our monthly stats, here’s a quick look at their press release.

Home sales sizzling around Western Washington, with volumes reaching 10-year high

Temperatures around Western Washington were not the only thing sizzling during June. Northwest Multiple Listing Service members reported 11,453 pending sales last month, the highest volume since August 2005 when members notched 11,546 mutually accepted offers. Last month also marked the fourth consecutive month of 11,000-plus pending transactions.

MLS members credit first-time buyers, an influx of relocating workers, and escalating rents for part of the surge.

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.

Home salespeople are no longer attempting to hide how giddy they are that prices are surging once again. They’re in all-out party mode. We’ll see how long the party lasts this time.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

Closed sales rose 8 percent from May to June. Last year they rose 6 percent over the same period. Closed sales volume in May was at its highest level since August 2006. Only six months since January 1993 have ever seen 3,000 or more closed sales of single-family homes in King County.

Here’s the graph of inventory with each year overlaid on the same chart.

Inventory inched up again slightly May to June, but yet again turned in the lowest ever recorded level for the time of year. Year-over-year inventory is still down double digits, with the largest decrease since May 2013.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

Everything in this chart is moving in sellers’ favor.

Here’s the median home price YOY change graph:

Back into double-digit territory.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

The median home price shot up in June to a new all-time high (not adjusted for inflation).

]]>http://seattlebubble.com/blog/2015/07/06/king-county-single-family-median-price-hits-new-record-at-half-a-million-dollars/feed/58http://seattlebubble.com/blog/2015/07/06/king-county-single-family-median-price-hits-new-record-at-half-a-million-dollars/June Stats Preview: Sales Spike Up Sharplyhttp://feedproxy.google.com/~r/SeattleBubble/~3/i1NcL2WeVdk/
http://seattlebubble.com/blog/2015/07/03/june-stats-preview-sales-spike-up-sharply/#commentsFri, 03 Jul 2015 22:00:44 +0000http://seattlebubble.com/blog/?p=30836Now that June is behind us, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series: Sales shot up to a multi-year high in both counties, inventory barely […]

]]>Now that June is behind us, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

Sales shot up to a multi-year high in both counties, inventory barely increased, and foreclosures were once again muted.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

Sales in King County rose 15 percent between May and June (in 2014 they rose 7 percent over the same period), and were up 21 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Deeds in Snohomish rose 17 percent month-over-month (vs. a 15 percent increase in the same period last year) and were up 16 percent from June 2014.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

Foreclosures in King County were down 38 percent from a year ago, but Snohomish County was up 3 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

Trustee Deeds were down 46 percent from a year ago, but were up slightly from a month ago.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

Inventory inched up again slightly in both counties month-over-month. King is currently down 23 percent from last year and Snohomish is down 17 percent.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

]]>http://seattlebubble.com/blog/2015/07/03/june-stats-preview-sales-spike-up-sharply/feed/7http://seattlebubble.com/blog/2015/07/03/june-stats-preview-sales-spike-up-sharply/Case-Shiller Tiers: All Three Tiers Increase Strongly in Aprilhttp://feedproxy.google.com/~r/SeattleBubble/~3/ciAcnnHkllU/
http://seattlebubble.com/blog/2015/07/02/case-shiller-tiers-all-three-tiers-increase-strongly-in-april/#commentsFri, 03 Jul 2015 02:00:36 +0000http://seattlebubble.com/blog/?p=30825Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties. Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details […]

]]>Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

Low Tier: < $291,658 (up 2.0%)

Mid Tier: $291,658 – $465,154

Hi Tier: > $465,154 (up 2.0%)

First up is the straight graph of the index from January 2000 through April 2015.

Here’s a zoom-in, showing just the last year:

All three tiers shot up strongly in April, with the middle tier gaining the most ground.

Between March and April, the low tier increased 2.5 percent, the middle tier rose 2.7 percent, and the high tier gained 2.0 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through April 2015.

Year-over-year price growth shrank slightly in the high tier, but grew in the low and middle tier. Here’s where the tiers sit YOY as of April – Low: +11.1 percent, Med: +7.1 percent, Hi: +7.0 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 15.9 percent off peak for the low tier, 10.2 percent off peak for the middle tier, and 3.7 percent off peak for the high tier.

]]>http://seattlebubble.com/blog/2015/07/02/case-shiller-tiers-all-three-tiers-increase-strongly-in-april/feed/4http://seattlebubble.com/blog/2015/07/02/case-shiller-tiers-all-three-tiers-increase-strongly-in-april/Case-Shiller: Seattle Home Prices Still Hot in Aprilhttp://feedproxy.google.com/~r/SeattleBubble/~3/LlWYCGwNd5c/
http://seattlebubble.com/blog/2015/07/02/case-shiller-seattle-home-prices-still-hot-in-april/#commentsFri, 03 Jul 2015 00:00:26 +0000http://seattlebubble.com/blog/?p=30816Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to April data, Seattle-area home prices were: Up 2.3% March to April Up 7.5% YOY. Down 7.4% from the July 2007 peak Last year at this time prices rose 2.3% month-over-month and year-over-year prices were up 11.2%. Year-over-year and month-over-month […]

Seattle’s position for month-over-month changes rose from #2 in March to #1 in April. No other metro area saw home prices increase more over the month than they did in Seattle.

The last time Seattle saw the largest month-over-month gain of all twenty cities was March 2011. Before that though, Seattle experienced a sustained period at or near the top of the month-over-month rankings when it was #1 for seven months between April 2006 and April 2007—just before Seattle’s July 2007 home price peak. It will be interesting to see if we stay at the top of the heap for long.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In April, five of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (the same as in March):

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the ninety-three months since the price peak in Seattle prices are still down 7.4%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of April 2015, Seattle prices are still closest to where they were in June 2006.

]]>http://seattlebubble.com/blog/2015/07/02/case-shiller-seattle-home-prices-still-hot-in-april/feed/2http://seattlebubble.com/blog/2015/07/02/case-shiller-seattle-home-prices-still-hot-in-april/Most New Listings Being Immediately Snatched Uphttp://feedproxy.google.com/~r/SeattleBubble/~3/Ygsr_VCad6k/
http://seattlebubble.com/blog/2015/06/29/most-new-listings-being-immediately-snatched-up/#commentsMon, 29 Jun 2015 15:02:43 +0000http://seattlebubble.com/blog/?p=30802A recent commenter had some questions about inventory: …how much of the “low inventory” story is really a story of “high churn”? …it doesn’t seem like there is really a shortage of inventory, but rather that there is a shortage of stale inventory. Would be really curious to see how how new listing rates for […]

…how much of the “low inventory” story is really a story of “high churn”?

…it doesn’t seem like there is really a shortage of inventory, but rather that there is a shortage of stale inventory. Would be really curious to see how how new listing rates for houses added the market each month have been trending. My impression is that what we have is really not a shortage of sellers compared to historical norms, but an excess of very impatient buyers.

As it turns out, I’ve got charts for that. First up, here’s a look at new listings for just the last month, compared to May of every other year:

New listings in May were down from last year and 2013. The last three years have been quite a bit better than 2010-2012, but are still quite a bit worse than the historic level we saw before the bust.

Here’s a look at the number of new listings added to the market in the last three months, compared to the same period in other years:

By this measure, new listings are at their highest level in the last five years, but again, still quite a bit below the pre-bust or even the pre-bubble levels.

Here’s a long-term view of every month back through 2000:

Before the housing bubble burst, it was common to see more than 3,500 listings every month April through September, often more than 4,000 a month. So far this year we haven’t hit the 3,500 mark yet.

The next chart shows the difference between the number of new listings each month and the number of pending sales. Prior to late 2011 this number was almost always positive, except in December, when very few new listings hit the market. From October 2011 through March 2013 this measure was negative, indicating very tight inventory.

Last year this measure hit +100 in April and stayed well into the positive range for the next six months. This year it barely edged above zero in April and May.

Finally, let’s take a look at the “stale listings” measure, which uses the total listings, new listings, and pending sales counts to estimate how many listings are “carried over” from one month to the next.

This number hasn’t ever been negative before this year. A negative number basically indicates that more listings sold in the month than were on the market at the end of last month.

There is definitely a high amount of “churn” right now, and obviously very few stale listings. However, no matter what way you measure, listings are still at very low levels in the current market.

]]>http://seattlebubble.com/blog/2015/06/29/most-new-listings-being-immediately-snatched-up/feed/201http://seattlebubble.com/blog/2015/06/29/most-new-listings-being-immediately-snatched-up/How Does Seattle City Councilmember Kshama Sawant Plan to “Make Seattle Affordable for All”?http://feedproxy.google.com/~r/SeattleBubble/~3/HXcaHA8_ZnA/
http://seattlebubble.com/blog/2015/06/23/how-does-seattle-city-councilmember-kshama-sawant-plan-to-make-seattle-affordable-for-all/#commentsTue, 23 Jun 2015 15:00:01 +0000http://seattlebubble.com/blog/?p=30785I drove down to Leschi last weekend, and I saw a surprising number of yard signs promoting the re-election of Kshama Sawant to the Seattle City Council. As you can see in the photo at right (taken from her campaign’s Twitter feed), the slogan on these signs implies that Sawant’s main goal is to “Make […]

]]>I drove down to Leschi last weekend, and I saw a surprising number of yard signs promoting the re-election of Kshama Sawant to the Seattle City Council. As you can see in the photo at right (taken from her campaign’s Twitter feed), the slogan on these signs implies that Sawant’s main goal is to “Make Seattle Affordable for All.”

It’s not explicitly stated, but since most people aren’t referring to the price of food or clothing when they complain about a specific place being unaffordable, I think it’s safe to assume that Sawant is talking about housing affordability—probably mostly focusing on rentals. I was very curious how she intends to “make Seattle affordable,” so I headed over to her campaign website to read her measured, thoughtful opinions on this economic conundrum.

Let’s have a look at her “issues” page on the “Make Seattle Affordable for All” topic:

Our city is becoming increasingly unequal and unaffordable. In one Seattle, glittering fortunes are being made for the super–rich and the major corporations that dominate its landscape. The other Seattle, where the rest of us live, faces skyrocketing rents and underfunded services.

I think most people will agree with this sentiment, at least on a high level. I mean, it’s blatantly populist and I don’t think the “us versus them” mentality is a particularly productive form of politics, but at least she’s on-topic so far.

While the Mayor and City Council give sweetheart deals to billionaire developers, we’re left with “stakeholder” committees and empty promises.

All right, what exactly are these “sweetheart deals” that the “billionaire developers” are getting from the Mayor and City Council? Can you cite them specifically?

Instead of investing in desperately needed mass transit, this same arrogant political elite is doubling down on the Bertha boondoggle, threatening to rack up hundreds of millions of dollars in cost overruns while safety concerns mount.

Wait. Hold on. I thought we were talking about housing affordability. You know, “billionaire developers” and whatnot. What does the Highway 99 tunnel fiasco have to do with this? Please explain the connection.

The political system in our city and throughout the country is beholden to corporate cash. A Republican-controlled Congress brazenly champions the interests of Wall Street. Here in Seattle, where the Democratic Party has governed for decades, big developers and downtown business interests nonetheless dominate city politics.

I am starting to get the feeling that she is not even going to attempt to explain how she hopes to address affordability on this page titled “Make Seattle Affordable for All.”

I am committed to building an alternative to this model of corporate politics. We need political representatives who are independent of corporate cash and corporate parties, who will give voice to the needs and aspirations of working people.
…
In line with the principles of the political party I represent, Socialist Alternative, I pledged to stay accountable to working people by taking only the average worker’s wage. Seattle City Councilmembers pay themselves $120,000 per year – the second highest amount of any city council in the country. Inevitably, such a salary removes councilmembers from the realities of life for poor and working people.

I only accept $40,000 per year after taxes. This amount is roughly the full-time take-home pay of an average Seattleite. The remainder of my salary goes to a Solidarity Fund to help build social justice movements.

And that’s the end of this page on her site. I am rather curious if she is really living on just $40,000 a year, since the mortgage payment on the house she bought last year and refinanced a few months ago would likely eat up about half of her $3,333 monthly pay. But I digress.

If you click through to the fourth page of the “Issues” section of her campaign website, you finally come to a page titled “Affordable Housing for All.” Maybe we’ll have better luck learning her plan here.

Seattle is facing a severe housing crisis and District 3 is at its epicenter. The for-profit housing model is not working, with big developers and speculators pushing workers and even middle-class families out of the city. Meanwhile, the City Council is working on behalf of big business rather than ordinary renters and homeowners.

This sounds more promising. We’re finally getting to the meat of her plan to “Make Seattle Affordable.” Here is what appears to be the crux of her plan:

We need rent control as an immediate step to address the crisis of out-of-control rents. The city council should immediately pass a resolution demanding the state government remove the ban on rent control, and bring a legal challenge to it. Most importantly, tenants, unions, and community organizations need to organize, building for major protests in Olympia to demand an end to the undemocratic state ban.

Working and middle-class people need an affordable alternative to the skyrocketing private housing market! The city should provide a public option by building thousands of high–quality, city-owned housing units, rented at below-market rates. This can be financed by selling municipal bonds and making use of currently vacant city land.

Seattle needs a Tenants’ Bill of Rights!

Tenants should have six months’ advance notice of a major rent increase, rather than the two months currently legally required.

Expand relocation assistance to those being economically evicted by out-of-control rent hikes. Tenants should receive the same $3,200 relocation assistance currently available for those evicted due to major construction.

Cap security deposits and move-in fees at no more than one month’s rent.

Housing is a human right! Fully fund an emergency plan to immediately offer decent shelter for the more than 3,000 homeless people on Seattle’s streets.

Mortgage relief for homeowners! Over 16,500 Seattle families have lost their homes to foreclosure since 2008. The city needs to stop dragging its feet and finally implement a principal reduction program for underwater homeowners to keep more families from losing their homes.

I’m not going to go over every one of these points, but I do want to address a few of them.

At the top of her list is rent control—the idea that the government can just dictate a ceiling on rent prices or rent increases. Despite being totally illegal here in Washington State, rent control definitely makes for great hashtags and soundbytes. Unfortunately, economists are near-unanimous in their agreement that rent control does not work. You can read study after study after study after study and they all say more or less the same thing. The really strange thing here is that Sawant has a PhD in Economics. This is something that she should understand better than most people.

Sawant also says that the city should “implement a principal reduction program for underwater homeowners.” This too is a terrible idea. If you took out a mortgage that you can’t afford to pay back, there already exists a “principal reduction program” for you: either sell the home or walk away and give it to the bank. The city should not be in the business of bailing out bad borrowing decisions.

Her plans to improve tenants’ rights and build more homeless shelters both seem relatively reasonable, and will definitely help some people. But it’s her suggestion for “building thousands of housing units” that really comes closest to a solution that would actually help make Seattle more affordable. The housing market is subject to supply and demand. Prices are currently rising sharply because demand is increasing more quickly than supply.

You can solve this basic problem in one of two ways: Decrease demand or increase supply. Building lots and lots of new housing units so that supply can catch up to demand is the only reasonable way to address affordability. Now, I’m not sold on Sawant’s suggestion that these units should be city-owned and “rented at below-market rates,” but she does at least get close to the actual solution to the affordability problem with this proposal.

It doesn’t have the same populist appeal as rent control, but dramatically increasing housing supply is something that would actually work, and if Sawant really wants to “Make Seattle Affordable for All,” that is where she should be focusing her energy.

]]>http://seattlebubble.com/blog/2015/06/23/how-does-seattle-city-councilmember-kshama-sawant-plan-to-make-seattle-affordable-for-all/feed/112http://seattlebubble.com/blog/2015/06/23/how-does-seattle-city-councilmember-kshama-sawant-plan-to-make-seattle-affordable-for-all/Foreclosure Levels Still Just Barely Above Pre-Bust Yearshttp://feedproxy.google.com/~r/SeattleBubble/~3/XMc5jCdccLs/
http://seattlebubble.com/blog/2015/06/22/foreclosure-levels-still-just-barely-above-pre-bust-years/#commentsMon, 22 Jun 2015 14:43:13 +0000http://seattlebubble.com/blog/?p=30779It’s been a few months since we took a detailed look at foreclosure stats in King, Snohomish, and Pierce counties, so let’s update those numbers. First up, the Notice of Trustee Sale summary: May 2015 King: 306 NTS, down 27% YOY Snohomish: 162 NTS, down 18% YOY Pierce: 279 NTS, down 14% YOY The number […]

The percentage of households in the chart above is determined using OFM population estimates and household sizes from the 2000 Census. King County came in at 1 NTS per 2,742 households, Snohomish County had 1 NTS per 1,726 households, and Pierce had 1 NTS for every 1,140 households (higher is better).

According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate for May of one foreclosure for every 1,232 housing units was 17th highest among the 50 states and the District of Columbia. Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using, and includes Notice of Default, Lis Pendens, Notice of Trustee Sale, and Real Estate Owned.

Hit the jump for a larger version of the chart that shows the percentage of households in each county receiving a foreclosure notice each month:

Note: The graphs above are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, hit this chart and drag the date slider to its full range. For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.

]]>http://seattlebubble.com/blog/2015/06/22/foreclosure-levels-still-just-barely-above-pre-bust-years/feed/10http://seattlebubble.com/blog/2015/06/22/foreclosure-levels-still-just-barely-above-pre-bust-years/Around the Sound: Misery for Buyers Everywherehttp://feedproxy.google.com/~r/SeattleBubble/~3/3N7ySXdEv1M/
http://seattlebubble.com/blog/2015/06/17/around-the-sound-misery-for-buyers-everywhere/#commentsWed, 17 Jun 2015 15:00:26 +0000http://seattlebubble.com/blog/?p=30765Let’s update our monthly stats for the local regions outside of the King/Snohomish core. Here’s your May update to our “Around the Sound” statistics for Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties. Are things any better in the market right now for buyers outside of the core Seattle areas? Unfortunately, not really. It’s still […]

]]>Let’s update our monthly stats for the local regions outside of the King/Snohomish core. Here’s your May update to our “Around the Sound” statistics for Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

Are things any better in the market right now for buyers outside of the core Seattle areas? Unfortunately, not really. It’s still a pretty terrible time to be buying a home just about anywhere in the Puget Sound area.

First up, a summary table:

May 2015

King

Snohomish

Pierce

Kitsap

Thurston

Island

Skagit

Whatcom

Median Price

$480,942

$350,000

$255,000

$266,950

$246,850

$286,000

$247,400

$289,000

Price YOY

8.7%

7.7%

8.5%

15.8%

7.8%

15.7%

6.0%

5.9%

Active Listings

3,280

1,816

2,818

911

1,085

577

545

1,000

Listings YOY

-21.1%

-17.7%

-17.8%

-26.4%

-14.8%

-24.8%

-30.4%

-22.4%

Closed Sales

2,684

1,082

1,203

329

344

150

178

288

Sales YOY

15.4%

26.1%

10.8%

10.4%

11.0%

25.0%

16.3%

34.0%

Months of Supply

1.2

1.7

2.3

2.8

3.2

3.8

3.1

3.5

Next let’s take a look at median prices in May compared to a year earlier. Prices were up from a year ago across the board. Gains ranged from as low as 6 percent in Whatcom to as high as 16 percent in Kitsap.

The number of listings on the market fell by double digits year-over-year in every county. The biggest loser of listings was Skagit County, where listings fell 30 percent from a year ago. The smallest decrease was in Thurston, where listings were down 15 percent from last year.

Closed sales increased in May compared to a year earlier in all eight counties. The biggest gains were in Whatcom County, which saw 34 percent more sales than last May. The smallest gains were in Kitsap County, where sales increased 10 percent.

Here’s a chart showing months of supply this May and last May. The market was less balanced than a year ago, skewing more toward sellers in all eight counties. The least terrible market for buyers was in Island County, which still has just 3.8 months of supply.

To close things out, here’s a chart comparing May’s median price to the peak price in each county. Technically everybody is still down from the peak, with drops ranging between just 0.01 percent in King County to 19 percent in Skagit County. Note of course that this chart is not adjusted for inflation. Here’s a recent post that shows how King County home prices look when you take inflation into account.

This year is basically a bust for home buyers, no matter where around the sound you’re looking for a home.

If there is certain data you would like to see or ways you would like to see the data presented differently, drop a comment below and let me know.

]]>http://seattlebubble.com/blog/2015/06/17/around-the-sound-misery-for-buyers-everywhere/feed/76http://seattlebubble.com/blog/2015/06/17/around-the-sound-misery-for-buyers-everywhere/Cheap South King County Sales Slippinghttp://feedproxy.google.com/~r/SeattleBubble/~3/FeIBvhOI1kM/
http://seattlebubble.com/blog/2015/06/15/cheap-south-king-county-sales-slipping/#commentsMon, 15 Jun 2015 14:00:27 +0000http://seattlebubble.com/blog/?p=30753It’s been a few months since we updated our look at how King County’s sales are shifting between the different regions around the county. This data is interesting to keep tabs on since geographic shifts can and do affect the median price. In order to explore this concept, we break King County down into three […]

]]>It’s been a few months since we updated our look at how King County’s sales are shifting between the different regions around the county. This data is interesting to keep tabs on since geographic shifts can and do affect the median price.

First up, let’s have a look at each region’s (approximate) median price (actually the median of the medians for each area within the region).

The median-median in the Eastside regions hit an all-time high of $703,000 back in December, but has since retreated to $687,500. Similarly, the mid-tier regions had hit an all-time high of $502,000 in April, but fell back to $472,981 in May. Month-over-month, the median price in the low tier fell 4.2 percent, the middle tier decreased 5.8 percent, and the high tier gained 1.4 percent.

Twenty-five of the twenty-nine NWMLS regions in King County with single-family home sales in May had a higher median price than a year ago, while fourteen had a month-over-month increase in the median price.

Next up, the percentage of each month’s closed sales that took place in each of the three regions.

Sales in all three regions spiked up dramatically between April and May, and month-to-month the mix shifted slightly away from the Eastside high tier and into the South King and Seattle regions. Month-over-month sales were up 15.7 percent in the low tier, up 16.1 percent in the middle tier, and up 10.3 percent in the high tier.

Year-over-year sales increased in all three tiers as well. Compared to a year ago, sales increased 23.1 percent in the low tier, rose 16.2 percent in the middle tier, and increased 6.9 percent in the high tier.

As of May 2015, 34.1 percent of sales were in the low end regions (up from 32.0 percent a year ago), 35.5 percent in the mid range (compared to 35.2 percent a year ago), and 30.4 percent in the high end (down from 32.8 percent a year ago).

Here’s that information in a visual format:

Finally, here’s an updated look at the percentage of sales data all the way back through 2000:

Between late last year and March of this year the share of homes sold in the cheap parts of King County shot up dramatically to nearly 40 percent—a level comparable what we saw during the last housing bubble. However, in April and May the share of sales in South King County fell back down to below the mid-tier regions. This sharp decrease in sales in the cheap regions in the past two months is most likely a big part of why the county-wide median price shot up from $440,000 in March to $480,000 in April and May.

]]>http://seattlebubble.com/blog/2015/06/15/cheap-south-king-county-sales-slipping/feed/21http://seattlebubble.com/blog/2015/06/15/cheap-south-king-county-sales-slipping/May Reporting Roundup: Never a Better Market Editionhttp://feedproxy.google.com/~r/SeattleBubble/~3/fgNBCHyhYEE/
http://seattlebubble.com/blog/2015/06/08/may-reporting-roundup-never-a-better-market-edition/#commentsMon, 08 Jun 2015 14:02:57 +0000http://seattlebubble.com/blog/?p=30746It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat). To kick things off, here’s an excerpt from the NWMLS press release: J. Lennox […]

]]>It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

J. Lennox Scott, chairman and CEO of John L. Scott, Inc. called 2015 “the best start ever for sales activity.” Citing MLS figures, he noted cumulative pending home sales in the four-county Puget Sound area for the first five months of the year are outpacing the previous record year of 2005. “This time,” he emphasized, “the housing market is built on a strong foundation of qualified buyers.”
…
“Locally, home prices are continuing to rise at a steady pace, and they continue to outpace both inflation and wage gains,” observed Mike Gain, CEO/president at Berkshire Hathaway HomeServices Northwest. Pent-up demand is pushing inventory lower, he notes. Gain believes the supply challenges could be alleviated if more sellers put their home on the market. “Sellers may never see a better time to be a seller,” commented Gain, a former chairman of the Northwest MLS board.
…
Mike Gain expects historically low interest rates, a growing economy, improving consumer confidence and consumer finances will continue to fuel activity and push up the numbers. “Anyone who can buy a home today at today’s prices with today’s low interest rates should do it. In my opinion, prices and monthly payments will never be lower than they are today.”

I love it when salespeople throw around over-the-top hyperbole and absolutes like “never.” No way that will ever come back to haunt them.

This month I could only find three articles in the local media outlets about the latest NWMLS numbers, despite waiting all weekend for more stories to come in. Apparently “yeah, it’s still a terrible time to be a homebuyer” is not considered very newsworthy.

Read on for my take on this month’s local news reports.

Seattle Times

The [inventory] shortage in King County is historic: May marked the third month in a row the county had less than a month’s supply of homes and condos for sale, which hasn’t happened since at least 2004, according to a Seattle Times analysis of MLS data.

“You’re at crisis levels. Something’s got to be done,” said Stephen O’Connor, director of the Runstad Center for Real Estate Studies at the University of Washington. “There has to be some level of comprehensive strategy here to figure out how to bring in more supply.”

With interest-rate hikes on the horizon, buyers appear willing to duke it out in bidding wars and pay a premium for living in King County’s urban corridors to avoid long commutes and surging rents, real-estate agents say.

“It’s like buying a loaf of bread for $10 because there’s nothing left on the shelf and you’ve got company coming,” said Mark Ossinger, a Seattle-based designated broker for Fathom Realty.

Oh man, I am totally going to get into the bread sales brokerage business.

Puget Sound Business Journal

The number of condo and house sales in the central Puget Sound region jumped 15 percent last month over the previous year, even as the number of residences for sale dropped precipitously.

The result: an even tighter housing market with home prices climbing at more than 9 percent, according to data the Northwest Multiple Listing Service (NWMLS) issued on Thursday.

In a balanced market, there is a four- to six-month supply of inventory. But in King County there was only 1.2 months of inventory last month, and several neighborhoods near Seattle’s job centers had less than a month of supply.

To be honeset, there isn’t much substance to the PSBJ article this month. It was mostly just a slight rehash of the press release.

Tacoma News Tribune / The Olympian

Prices up, and multiple offers for homes for sale in many neighborhoods.

According to the Northwest Multiple Listing Service, May was a great month to be selling a home but a not-so-good month if you were looking to buy.

“The crush between the lack of inventory and desperate buyers may soon generate the next TV reality show,” stated Dick Beeson, an MLS director and principal managing broker at RE/MAX Professionals in Tacoma.

Similar story in the News Tribune this month. I guess there is only so much you can say about low inventory.

]]>http://seattlebubble.com/blog/2015/06/08/may-reporting-roundup-never-a-better-market-edition/feed/82http://seattlebubble.com/blog/2015/06/08/may-reporting-roundup-never-a-better-market-edition/NWMLS: Market Goes From Bad to Worse for Buyershttp://feedproxy.google.com/~r/SeattleBubble/~3/OgZcOSAj04M/
http://seattlebubble.com/blog/2015/06/05/nwmls-market-goes-from-bad-to-worse-for-buyers/#commentsFri, 05 Jun 2015 15:07:46 +0000http://seattlebubble.com/blog/?p=30726May market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release. Northwest MLS brokers say home buyers are sprinting, but sellers are stalling Home buyers are in “full sprint” mode while sellers are stalling, according to brokers from Northwest Multiple Listing Service. […]

]]>May market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release.

Northwest MLS brokers say home buyers are sprinting, but sellers are stalling

Home buyers are in “full sprint” mode while sellers are stalling, according to brokers from Northwest Multiple Listing Service. As a result, MLS members are juggling severe inventory shortages and multiple offers in many Seattle neighborhoods and beyond.

MLS figures for May show double-digit drops in inventory compared to a year ago and double-digit gains in both sales and prices. Commenting on the numbers, Northwest MLS director Dick Beeson said “The crush between the lack of inventory and desperate buyers may soon generate the next TV reality show! The stressed market is exhausting everyone in its path, with no relief in sight.”
…
J. Lennox Scott, chairman and CEO of John L. Scott, Inc. called 2015 “the best start ever for sales activity.” Citing MLS figures, he noted cumulative pending home sales in the four-county Puget Sound area for the first five months of the year are outpacing the previous record year of 2005. “This time,” he emphasized, “the housing market is built on a strong foundation of qualified buyers.”

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

Unfortunately for buyers, there’s still no good news on supply. Inventory is pitiful and shows no glimmer of getting any better soon. With inventory as low as it is and interest rates still so low, I’m actually surprised home prices are only up six percent from a year ago.

Here’s your closed sales yearly comparison chart:

Closed sales rose 14 percent from April to May. Last year they rose 15 percent over the same period. Only two years had more closed sales in May than this year: 2004 and 2005. Meanwhile, pending sales have hit an all-time high , but that is less meaningful since the NWMLS changed their definition of “pending” in July 2008.

Here’s the graph of inventory with each year overlaid on the same chart.

Inventory did go up slightly from April to May, but still turned in the lowest ever recorded level for a May.Year-over-year inventory is still down double digits, off 21 percent from 2014. This is the largest year-over-year decrease in inventory in two years.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

The demand trend inched slightly back toward buyers’ favor in May, but the supply curve is going from bad to worse.

Here’s the median home price YOY change graph:

Once again I find myself surprised that this chart has fallen below double-digit territory.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

The median home price inched up in May to a number comically close to the July 2007 peak. Literally less than sixty dollars below the nominal peak value reached nearly eight years ago.

]]>http://seattlebubble.com/blog/2015/06/05/nwmls-market-goes-from-bad-to-worse-for-buyers/feed/55http://seattlebubble.com/blog/2015/06/05/nwmls-market-goes-from-bad-to-worse-for-buyers/Home Salesperson Quote of the Dayhttp://feedproxy.google.com/~r/SeattleBubble/~3/b2MfgEwYRY4/
http://seattlebubble.com/blog/2015/06/03/home-salesperson-quote-of-the-day/#commentsWed, 03 Jun 2015 15:42:43 +0000http://seattlebubble.com/blog/?p=30713From an article in today’s Everett Herald Business Journal: It’s a seller’s market as Snohomish County home prices rebound I don’t think we’re anywhere near in a position to worry about another bubble. The increase in appreciation has been pretty steady. It hasn’t gone up overnight. – Deidre Haines, Broker with Coldwell Banker Bain “Not […]

]]>http://seattlebubble.com/blog/2015/06/03/home-salesperson-quote-of-the-day/feed/31http://seattlebubble.com/blog/2015/06/03/home-salesperson-quote-of-the-day/May Stats Preview: No Improvement for Buyershttp://feedproxy.google.com/~r/SeattleBubble/~3/mHjhBpzoPDk/
http://seattlebubble.com/blog/2015/06/01/may-stats-preview-no-improvement-for-buyers/#commentsMon, 01 Jun 2015 13:30:13 +0000http://seattlebubble.com/blog/?p=30700With May 2015 now in the rear view mirror, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series: Inventory went up again month-over-month in both King and […]

]]>With May 2015 now in the rear view mirror, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

Inventory went up again month-over-month in both King and Snohomish counties, but by less than it did last year over the same period. Meanwhile, sales also rose in King County, but fell slightly in Snohomish. Year-over-year sales were up in both counties, while inventory was down double digits again. Foreclosure notices declined yet again from 2014 in both counties.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

Sales in King County rose 6 percent between April and May (in 2014 they rose 10 percent over the same period), and were up 13 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Deeds in Snohomish fell 8 percent month-over-month (vs. a 4 percent decrease in the same period last year) and were up 14 percent from May 2014.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

Foreclosures in King County were down 28 percent from a year ago, but Snohomish County was down 18 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

Trustee Deeds were down 52 percent from a year ago, falling to their lowest point since March 2008.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

Inventory inched up again slightly in both counties month-over-month. King is currently down 20 percent from last year and Snohomish is down 18 percent.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

]]>http://seattlebubble.com/blog/2015/06/01/may-stats-preview-no-improvement-for-buyers/feed/34http://seattlebubble.com/blog/2015/06/01/may-stats-preview-no-improvement-for-buyers/Earnest Money Disputes and HB 1730http://feedproxy.google.com/~r/SeattleBubble/~3/S55vvAyBc-E/
http://seattlebubble.com/blog/2015/05/29/earnest-money-disputes-and-hb-1730/#commentsFri, 29 May 2015 14:00:54 +0000http://seattlebubble.com/blog/?p=30673A word from The Tim: This post is from long-time Seattle Bubble participant Kary Krismer, managing broker with John L. Scott/KMS Renton. Kary’s expertise in both real estate and law gives him a good perspective on issues like this tweak in earnest money law here in Washington State. Thanks, Kary! Disputes over the release of […]

]]>A word from The Tim: This post is from long-time Seattle Bubble participant Kary Krismer, managing broker with John L. Scott/KMS Renton. Kary’s expertise in both real estate and law gives him a good perspective on issues like this tweak in earnest money law here in Washington State. Thanks, Kary!

Disputes over the release of earnest money are extremely rare, but anyone who has ever been involved with one knows they can be an extremely miserable experience. For a buyer with limited funds it can mean a lengthy delay in being able to make an offer on another property. For both parties it can be very emotionally draining and expose them to the potential of paying attorney fees—both their own and those of the other party.

The most common scenario for an earnest money dispute is after a buyer terminates a contract based on the Form 35 inspection contingency. That contingency is based on a subjective standard, so assuming the buyer’s agent followed proper procedures to give notice, and that there’s no element of “bad faith” in the contract process, the buyer should be entitled to the return of their earnest money. Unfortunately the seller may act in an irrational manner, and refuse to sign the documents that an escrow will likely require allowing the return of funds. Escrows usually will require the signatures of all the parties because they do not want to risk being sued for an incorrect return of the funds, particularly on a transaction which they will not be making any money.

The NWMLS statewide forms (e.g. Form 21) attempted to deal with this problem by setting up a notice procedure which would allow the escrow to release the earnest to the party demanding it. Unfortunately very few escrows have been willing to follow that procedure, and not being a party to the contract, they have not been required to follow that procedure. Instead, if the parties did not come to an agreement the escrow would eventually deposit the earnest money into a Superior Court registry by initiating an interpleader action.

Fortunately the legislature has noticed this problem and passed HB 1730 (pdf) which applies to residential real property transactions. HB 1730 does several things. Most notably it requires that within 15 days after receipt of a written demand for the earnest money that the Holder of the earnest money:

Send a notice to all the other parties to the contract;

Release the funds to the demanding party; or

Interplead the funds.

A Holder following either option 1 or 3 will be protected from liability. Assuming a notice is sent, it will give the other parties 20 days to object to the release of the funds, and give them an address to send their objection. If no response is received within the 20 day period, the Holder has ten days to release the funds to the demanding party. If an objecting response is received, then the Holder has 60 days to commence an interpleader action, absent further agreement of the parties.

The notice is required to be sent to the known address and email addresses of the parties, and the Holder is not required to look outside its records to find an address. This makes filling in the address or email address (preferably both) of the parties on the purchase and sale agreement critical, as well as notifying the Holder of any change of address. [Note: It is somewhat unlikely the Holder would know the parties’ email addresses until after the parties return the Holder’s “Open Package.”]

HB 1730 is not effective until July 24, 2015, but it is effective as to any earnest money held on that date. That means that real estate agents should make sure at least the mailing addresses of the buyer(s) and seller(s) are included in their current purchase and sale agreements, as well as their email addresses if possible. And it also means that buyers and sellers should check to make sure those mailing addresses are included on any contracts that they sign. It is not exactly clear what will happen if that information is not provided, but one likely possibility is the escrow will start an interpleader action within 15 days of the demand for earnest money, and if that occurs, HB 1730 requires the court to pay the Holder their attorney fees and costs, leaving less money for the buyer(s) and seller(s) to fight over.

Disclaimer: This piece is not intended to be legal advice, but is merely the author’s understanding of the operation of the new legislation. Persons needing or wanting legal advice would need to contact and hire their own attorney. Real estate brokers may want to also contact their designated brokers.

]]>http://seattlebubble.com/blog/2015/05/29/earnest-money-disputes-and-hb-1730/feed/22http://seattlebubble.com/blog/2015/05/29/earnest-money-disputes-and-hb-1730/Quill Leaves NWMLS, Dramatically Slashes Listing Costhttp://feedproxy.google.com/~r/SeattleBubble/~3/zV4z1iiXJCg/
http://seattlebubble.com/blog/2015/05/28/quill-leaves-nwmls-dramatically-slashes-listing-cost/#commentsThu, 28 May 2015 17:11:33 +0000http://seattlebubble.com/blog/?p=30679Full disclosure: Quill Realty is a Seattle Bubble advertiser, and Tim worked with Craig at his previous company WaLaw (also an advertiser) to buy his home in 2011. Last week local brokerage Quill Realty (spotlighted in this 2014 post) announced that they will be withdrawing from the NWMLS completely in order to “offer broker services […]

]]>Full disclosure: Quill Realty is a Seattle Bubble advertiser, and Tim worked with Craig at his previous company WaLaw (also an advertiser) to buy his home in 2011.

Last week local brokerage Quill Realty (spotlighted in this 2014 post) announced that they will be withdrawing from the NWMLS completely in order to “offer broker services to sellers who want to avoid the cost of a cooperating broker.”

As longtime readers of this site know, I have something of a love-hate relationship with the NWMLS. I love how open they are with much of their data, and I definitely love that listings are kept current in their database, but I hate many of their backward and overbearing rules, and I’m not a fan of some of their data processing methods.

That said, being listed in the local MLS has been the only way to reliably sell your home quickly and for the best price, even back when the MLS was literally a 3-ring binder with listing printouts.

So how does Craig (owner & managing broker of Quill) hope to compete post-MLS? Here’s an excerpt from his press release:

This will allow Quill to sell homes while charging owners only its own, single broker commission of 1%. So home owners will soon be able to sell their houses using the services of a fully licensed REALTOR™ for far less than the 3% to 6% of the MLS.
…
Quill anticipates being able to put its listings on numerous, highly trafficked web sites, such as Zillow, Redfin, and Realtor.com, exactly those places where buyers are searching today. All without using the NWMLS and without paying the commission of a cooperating broker who represents the buyer.

Will the appeal of paying just one percent of the sale price to a real estate broker be enough to lure sellers to take the plunge? It’s not the first time this kind of thing has been attempted. In fact, it is very similar to the model Redfin began with ten years ago (although Redfin was focused on buyers and Quill is targeting sellers). Over the years, Redfin’s fees have gone up and their service has become closer to what’s provided a typical agent.

The biggest question I had for Craig was whether buyers who are already working with an agent would be steered away from Quill listings since Quill will not be offering to pay the typical three percent to the buyer’s agent. Here’s what Craig had to say about that:

First and foremost, Quill will be relying on the legal and ethical duties of real estate brokers. This conduct you describe may be illegal, and it is grossly unethical. So I believe this won’t happen as often as you are assuming.
…
Buyers of Quill listings will know as much about the listing as their agent. They won’t need their agent to tour the home, and they won’t need their agent to make an offer. At the end of the day, I like how those disincentives stack up. Those unethical brokers who might be inclined to steer clients away from Quill-listed homes will soon realize that they are making a poor decision. They will soon realize that it is in their interests to assist their clients in buying the homes their clients want to buy, whether listed with Quill or any other real estate firm.

Quill’s new model is similar to what Surefield launched last November (Surefield is also a Seattle Bubble advertiser, and is a Quill partner). The differences between Surefield’s model and Quill’s new model are that Surefield is still an NWMLS member, they charge slightly more at 1.5%, they offer a $2,000 flat commission to buyers’ agents, and their listings include their signature 3D virtual tour on their website.

The current listings-scarce market definitely seems like an ideal time to try something like this. Buyers are desperate for listings, and if they find something they want, they’re most likely going to do whatever it takes to see it, whether it’s listed on the MLS or not.

I’m definitely a fan of moves that will save home buyers and sellers money and bring further pro-consumer change to the real estate industry. I’m not yet convinced that consumers are ready for something this dramatic, and I still think Craig has an uphill battle ahead of him when it comes to dealing with the entrenched interests of buyers’ agents, but I do hope he succeeds.

]]>http://seattlebubble.com/blog/2015/05/28/quill-leaves-nwmls-dramatically-slashes-listing-cost/feed/139http://seattlebubble.com/blog/2015/05/28/quill-leaves-nwmls-dramatically-slashes-listing-cost/Case-Shiller Tiers: High Tier Prices Shoot Uphttp://feedproxy.google.com/~r/SeattleBubble/~3/fy3P-d1NacI/
http://seattlebubble.com/blog/2015/05/27/case-shiller-tiers-high-tier-prices-shoot-up/#commentsWed, 27 May 2015 15:04:16 +0000http://seattlebubble.com/blog/?p=30665Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties. Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details […]

]]>Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

Low Tier: < $286,068 (up 1.8%)

Mid Tier: $286,068 – $456,009

Hi Tier: > $456,009 (up 2.0%)

First up is the straight graph of the index from January 2000 through March 2015.

Here’s a zoom-in, showing just the last year:

All three tiers shot up strongly in March, with the high tier gaining the most ground.

Between February and March, the low tier increased 1.1 percent, the middle tier rose 1.9 percent, and the high tier gained 2.9 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through March 2015.

Year-over-year price growth actually shrank slightly in the low and middle tiers, but grew in the high tier. Here’s where the tiers sit YOY as of March – Low: +9.7 percent, Med: +5.8 percent, Hi: +7.7 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 18.0 percent off peak for the low tier, 12.6 percent off peak for the middle tier, and 5.6 percent off peak for the high tier.

]]>http://seattlebubble.com/blog/2015/05/27/case-shiller-tiers-high-tier-prices-shoot-up/feed/26http://seattlebubble.com/blog/2015/05/27/case-shiller-tiers-high-tier-prices-shoot-up/Case-Shiller: Home Prices Shot Up in Marchhttp://feedproxy.google.com/~r/SeattleBubble/~3/X0XkPWuMYNM/
http://seattlebubble.com/blog/2015/05/26/case-shiller-home-prices-shot-up-in-march/#commentsTue, 26 May 2015 19:00:48 +0000http://seattlebubble.com/blog/?p=30654Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to March data, Seattle-area home prices were: Up 2.3% February to March Up 7.5% YOY. Down 9.4% from the July 2007 peak Last year at this time prices rose 1.9% month-over-month and year-over-year prices were up 11.6%. Year-over-year price gains […]

Up 2.3% February to MarchUp 7.5% YOY.Down 9.4% from the July 2007 peak

Last year at this time prices rose 1.9% month-over-month and year-over-year prices were up 11.6%.

Year-over-year price gains edged up again in March as prices marked their highest month-over-month increase since last April.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities. Since Tableau lifted a bunch of the restrictions on their Tableau Public product, I’m back to Tableau. Check and un-check the boxes on the right to modify which cities are showing:

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the ninety-two months since the price peak in Seattle prices are still down 9.4%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of March 2015, Seattle prices are still closest to where they were in May 2006.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

]]>http://seattlebubble.com/blog/2015/05/26/case-shiller-home-prices-shot-up-in-march/feed/12http://seattlebubble.com/blog/2015/05/26/case-shiller-home-prices-shot-up-in-march/Low Rates Add $120K to the “Affordable” Home Pricehttp://feedproxy.google.com/~r/SeattleBubble/~3/EBlJgX0ShR8/
http://seattlebubble.com/blog/2015/05/21/low-rates-add-120k-to-the-affordable-home-price/#commentsThu, 21 May 2015 17:00:17 +0000http://seattlebubble.com/blog/?p=30643As promised in yesterday’s affordability post, here’s an updated look at the “affordable home” price chart. In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the a family earning the median household income could afford to buy at today’s mortgage […]

In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the a family earning the median household income could afford to buy at today’s mortgage rates if they put 20% down and spent 30% of their monthly income.

The “affordable” home price has made some strong gains recently thanks to the combination of increasing incomes and decreasing mortgage interest rates. The “affordable” home price in King County hit an all-time high of $496,051 in April, with a monthly payment of $1,820.

If interest rates were at a more reasonable level of 6 percent (which is still quite low by historical standards), the “affordable” home price would be just $379,423—about $120,000 lower than it is today.

Here’s the alternate view on this data, where I flip the numbers around to calculate the household income required to make the median-priced home affordable at today’s mortgage rates, and compare that to actual median household incomes.

As of April, a household would need to earn $70,439 a year to be able to “afford” the median-priced $480,000 home in King County. This is up from the low of $46,450 in February 2012, but still down slightly from the 2014 high point of $72,625 set in July. Meanwhile, the actual median household income is around $73,000.

If interest rates were 6% (around the pre-bust level), the income necessary to buy a median-priced home would be $92,091—27 percent above the current median income.

In other words (and I realize I sound like a broken record on this), ridiculously low rates are basically the only thing allowing home prices to be as ridiculously high as they are today.

]]>http://seattlebubble.com/blog/2015/05/21/low-rates-add-120k-to-the-affordable-home-price/feed/55http://seattlebubble.com/blog/2015/05/21/low-rates-add-120k-to-the-affordable-home-price/Affordability Index Kept Under Control by Low Rateshttp://feedproxy.google.com/~r/SeattleBubble/~3/6klVQ0Fxbyk/
http://seattlebubble.com/blog/2015/05/20/affordability-index-kept-under-control-by-low-rates/#commentsWed, 20 May 2015 16:00:41 +0000http://seattlebubble.com/blog/?p=30635A reader pointed out that we haven’t looked at how the affordability index is doing in the Seattle area since late last year. Let’s update our standard charts. So how does affordability look as of April? Despite median home prices shooting up, falling interest rates that are back below 4 percent again have kept the […]

]]>A reader pointed out that we haven’t looked at how the affordability index is doing in the Seattle area since late last year. Let’s update our standard charts.

So how does affordability look as of April? Despite median home prices shooting up, falling interest rates that are back below 4 percent again have kept the index just above the “affordable” level of 100. The index currently sits at 103.3. An index level above 100 indicates that the monthly payment on a median-priced home costs less than 30% of the median household income.

I’ve marked where affordability would be if interest rates were at a slightly more sane level of 6%—79.0. That’s worse than any point other than 2006 through mid-2008. In other words, if interest rates were anywhere near a “normal” level, we’d be well into serious bubble territory.

Here’s a look at the index for Snohomish County and Pierce County since 2000:

Both Snohomish and Pierce are still seeing much higher levels of affordability than King County, but are following the same general trend. The affordability index in Snohomish currently sits at 128.5, while Pierce County is at 166.4.

Tomorrow I will post updated versions of my charts of the “affordable” home price and income required to afford the median-priced home. Hit the jump for the affordability index methodology, as well as a bonus chart of the affordability index in the outlying Puget Sound counties.

]]>http://seattlebubble.com/blog/2015/05/20/affordability-index-kept-under-control-by-low-rates/feed/14http://seattlebubble.com/blog/2015/05/20/affordability-index-kept-under-control-by-low-rates/Reader Question: Is Seattle just for the super wealthy now?http://feedproxy.google.com/~r/SeattleBubble/~3/iUwuJENt3kc/
http://seattlebubble.com/blog/2015/05/13/reader-question-is-seattle-just-for-the-super-wealthy-now/#commentsWed, 13 May 2015 17:13:56 +0000http://seattlebubble.com/blog/?p=30627I received the following question this morning from a frustrated home buyer: We recently lost our second offer on a home to a all case buyer. I know that many other buyers have been at this longer than a year and spent far more than we have but before I get to that poverty point […]

]]>I received the following question this morning from a frustrated home buyer:

We recently lost our second offer on a home to a all case buyer. I know that many other buyers have been at this longer than a year and spent far more than we have but before I get to that poverty point I would like to show everyone what is going on.

The first time we made many mistakes such as: inspection contingency upon acceptance of offer, financial contingency, asking for rent from the owner if they wanted to stay past closing. Our first realtor was not informed and we just used wisdom from previous house buying experiences on the East Coast. So, the second time we made an offer, we came in extremely strong.

Here are the facts that I would like to share with you to expose what we see as a scam.

House: ~3,000 square foot 5-bedroom home Ballard in great condition with an asking price ~$850k

We offered $10K over asking with an escalation clause up to $77K over asking.

We gave $30K as earnest money and allowed the seller to talk half upon acceptance of our offer.

We allowed the seller to stay in the property for 2 months after closing – rent free.

We spent $430 for a partial inception and sewer scope.

We dropped all contingencies – another words we would loose our 30K if our financing didn’t come thought or we changed our minds.

So tell me – how is our offer not as good as cash? So what is the short answer? Listing agent and real estate agencies in general are uses financing offers to drive up the amount for cash buyers – thus making the seller’s agent’s commission higher and they will get it 2 weeks sooner.

How can a hard working person, smart with their money, buy a home. Currently Seattle is on sale to China or the super wealthy for the highest cost at the middle classes expense.

Your thoughts?

It’s super frustrating out there right now for buyers. Unfortunately it’s a lot more difficult to predict the likely outcome of the frenzy this time around. Back in 2005 when I started Seattle Bubble the market was very similar, but it was obviously being propped up by a bunch of dangerous, unsustainable stuff like risky mortgages and financial derivatives.

This time around, as the reader points out, all-cash buyers are driving much of the frenzy. It’s very difficult to compete with, and also highly unlikely to collapse in a spectacular bursting bubble like last time.

What’s your advice for this reader? Sit it out for a year or two? Keep trying until maybe, two dozen offers later, they finally land a house? Lower their standards?

If you’ve got a question you’d like to get thoughts on from me and the community here, drop me a line.

]]>http://seattlebubble.com/blog/2015/05/13/reader-question-is-seattle-just-for-the-super-wealthy-now/feed/244http://seattlebubble.com/blog/2015/05/13/reader-question-is-seattle-just-for-the-super-wealthy-now/Around the Sound: Strong Seller’s Market Everywherehttp://feedproxy.google.com/~r/SeattleBubble/~3/FU2q7kijM9Q/
http://seattlebubble.com/blog/2015/05/12/around-the-sound-strong-sellers-market-everywhere/#commentsTue, 12 May 2015 16:00:35 +0000http://seattlebubble.com/blog/?p=30617It has been a while since we checked up on stats outside of the King/Snohomish core, so let’s update our “Around the Sound” statistics for Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties. This month’s story in a nutshell: Bad news for buyers, great news for sellers. It’s pretty much a terrible time to buy […]

]]>It has been a while since we checked up on stats outside of the King/Snohomish core, so let’s update our “Around the Sound” statistics for Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

This month’s story in a nutshell: Bad news for buyers, great news for sellers. It’s pretty much a terrible time to buy and an excellent time to sell no matter what part of the Puget Sound area you’re in.

First up, a summary table:

April 2015

King

Snohomish

Pierce

Kitsap

Thurston

Island

Skagit

Whatcom

Median Price

$480,000

$359,975

$249,950

$256,750

$234,000

$250,000

$241,900

$289,000

Price YOY

11.5%

12.5%

13.6%

8.1%

7.3%

-9.1%

7.5%

12.7%

Active Listings

3,003

1,644

2,622

807

1,086

515

496

896

Listings YOY

-15.2%

-16.3%

-16.2%

-30.9%

-4.1%

-23.5%

-28.0%

-21.8%

Closed Sales

2,352

1,024

1,228

328

332

131

165

251

Sales YOY

16.7%

34.0%

39.4%

21.5%

23.9%

42.4%

20.4%

47.6%

Months of Supply

1.3

1.6

2.1

2.5

3.3

3.9

3.0

3.6

Next let’s take a look at median prices in April compared to a year earlier. Prices were up from a year ago everywhere but Island County. Gains ranged from as low as 7 percent in Thurston to as high as 14 percent in Pierce.

The number of listings on the market fell year-over-year everywhere. The biggest loser of listings was Kitsap County, where listings fell 31 percent from a year ago. The smallest decrease was in Thurston, where listings were down 4 percent from last year.

Closed sales increased in April compared to a year earlier in all eight counties. The biggest gains were in Island County, which saw 42 percent more sales than last April. The smallest gains were in King County, where sales increased “just” 17 percent.

Here’s a chart showing months of supply this April and last April. The market was less balanced than a year ago, skewing more toward sellers in all eight counties.

To close things out, here’s a chart comparing April’s median price to the peak price in each county. Everybody is still down from the peak, with drops ranging between just 0.2 percent in King County to 29 percent in Island County.

If I had been thinking of buying a home this year, I would probably shelf those plans in this kind of market. In my opinion it is just not worth it for buyers right now.

If there is certain data you would like to see or ways you would like to see the data presented differently, drop a comment below and let me know.

]]>http://seattlebubble.com/blog/2015/05/12/around-the-sound-strong-sellers-market-everywhere/feed/34http://seattlebubble.com/blog/2015/05/12/around-the-sound-strong-sellers-market-everywhere/Median Price May Pass Inflation-Adjusted Peak This Yearhttp://feedproxy.google.com/~r/SeattleBubble/~3/PWMa58wgjyk/
http://seattlebubble.com/blog/2015/05/08/median-price-may-pass-inflation-adjusted-peak-this-year/#commentsFri, 08 May 2015 16:18:47 +0000http://seattlebubble.com/blog/?p=30607As promised, I’ve updated my chart of nominal and real (inflation-adjusted) King County median single-family home prices with data through April. When adjusting into 2015 dollars, the median price peaked at $527,607 in July 2007. April 2015’s median price of $480,000 comes in about 9 percent below that level, and is roughly comparable to where […]

]]>As promised, I’ve updated my chart of nominal and real (inflation-adjusted) King County median single-family home prices with data through April.

When adjusting into 2015 dollars, the median price peaked at $527,607 in July 2007. April 2015’s median price of $480,000 comes in about 9 percent below that level, and is roughly comparable to where prices were in May 2006.

Last year home prices increased 8.7 percent between April and their 2014 high point in July. If we see another similar increase this year we’ll come just shy of the inflation-adjusted price peak in 2015, hitting about $522,000 in July.

In other words, any way you look at it, home prices are really high right now.

]]>http://seattlebubble.com/blog/2015/05/08/median-price-may-pass-inflation-adjusted-peak-this-year/feed/29http://seattlebubble.com/blog/2015/05/08/median-price-may-pass-inflation-adjusted-peak-this-year/April Reporting Roundup: “You Should Buy Now” Editionhttp://feedproxy.google.com/~r/SeattleBubble/~3/bzNcOOOcxvg/
http://seattlebubble.com/blog/2015/05/07/april-reporting-roundup-you-should-buy-now-edition/#commentsThu, 07 May 2015 16:13:38 +0000http://seattlebubble.com/blog/?p=30599It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat). To kick things off, here’s an excerpt from the NWMLS press release: Northwest Multiple […]

It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.
…
Within the four county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, “That is super amazing.”
…[Principal managing broker at RE/MAX Professionals in Tacoma and MLS director Dick] Beeson cautioned buyers against “playing games” with sellers. “The new normal for buyers is that the quest for the perfect home may have to wait,” suggested Beeson. “You should buy now, get in the mix, buy a home and build equity for a future decision,” he advised. “Don’t wait to pay more for the same home next year.”

Brokers do not appear to be worried about a housing bubble.

“Some are talking about the potential for another housing bubble given the lack of homes for sale and the bullishness of buyers in bidding up properties,” acknowledged [Windermere Real Estate president OB] Jacobi. “For now,” he said, “I believe there are sufficient safeguards in place to keep this from happening.”

Classic Beeson. He’s got such a great track record for predictions. I definitely think it is a good idea to take his advice that you should buy now, don’t wait! P.S. – That was extremely sarcastic.

I’d also love to know what “safeguards” OB Jacobi believes are in place to keep another bubble from happening. You know, other than wishes on stars.

Seattle Times

Buyers have hit the gas, fearing higher interest rates and offering premium prices in the face of a record low inventory of homes for sale.

“This is a historic moment in time,” said J. Lennox Scott, CEO of John L. Scott brokerage. “Housing is in a pressure cooker in the metro area. We’re going to be here for a while.”
…
One extreme example of that pressure is a 1,120-square-foot north Ballard home that sold last month for $158,000 above its asking price. While Windermere broker Phil Greely said he’s delighted with the price he got for his seller, “for buyers it’s a slightly depressing story.”
…
The three-bedroom, one-bath house drew 13 offers, most with so-called escalator clauses that ratchet up to compete with higher bids. The top offers waived every consumer safeguard in the contract, known as “contingencies,” effectively giving up their earnest money. The winner put up roughly $100,000 in earnest money, Greely said, and released half of it immediately to the seller once the offer was accepted.

I think we can officially declare that whether or not this market is a “bubble,” it’s definitely become completely absurd. If I was dead-set on owning a home, I would rather move away from the Seattle area entirely than pay over $700,000 for a 1,100 square foot shack in Ballard. Ridiculous.

Puget Sound Business Journal

You may have heard that millennials don’t buy houses. The Great Recession and housing bubble scared them away.

For some, myself included, that’s true.

But for millennials who are watching their rents go up and up and up, buying a home is looking like a more attractive option.

Combine that with low interest rates and a flood of new people to the area, and you’ll see what’s currently playing out in Seattle.

Buying a home may look attractive if your rent just went up, but in this extreme seller’s market the appeal will evaporate pretty quickly once you actually realize how much time and money it will take to buy a home.

Tacoma News Tribune / The Olympian

The South Sound housing market remained hot in April as closed sales of single-family residences jumped by more than 20 percent in Pierce and Thurston counties, according to housing data released Tuesday by the Northwest Multiple Listing Service.

But can all potential buyers or sellers actually find a single-family residence or move-up property to buy?

That’s increasingly becoming the challenge for both markets as the number of single-family residences for sale fell 16 percent in Pierce County from the period a year ago, and fell 4 percent in Thurston County.

And that means the inventory of single-family residences on the market continues to drift lower, the data show.

]]>http://seattlebubble.com/blog/2015/05/07/april-reporting-roundup-you-should-buy-now-edition/feed/38http://seattlebubble.com/blog/2015/05/07/april-reporting-roundup-you-should-buy-now-edition/NWMLS: King County Home Prices Near Bubble Peakhttp://feedproxy.google.com/~r/SeattleBubble/~3/ILNTzTAT1vs/
http://seattlebubble.com/blog/2015/05/06/nwmls-king-county-home-prices-near-bubble-peak/#commentsWed, 06 May 2015 16:00:05 +0000http://seattlebubble.com/blog/?p=30587April market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release. Pent-up demand triggering record pace of home sales around Western Washington Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by […]

]]>April market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release.

Pent-up demand triggering record pace of home sales around Western Washington

Northwest Multiple Listing Service members notched a record high level of pending sales during April, surpassing the year-ago volume by nearly 1,800 transactions. Both closed sales and prices also surged last month as the spring market kicked into high gear.

Buyer confidence and buyer ability to purchase are fueling activity, suggested Ken Anderson, the managing broker and owner of Coldwell Banker Evergreen Olympia Realty. “Long building pent-up demand is being unleashed,” he commented.
…
Closed sales and prices also accelerated, according to Northwest MLS statistics. Across the 23 counties covered by the report there were 7,696 closed sales. That total represents a 24.3 percent increase from the year-ago volume of 6,190 closings. Within the four county region, Pierce County experienced a jump of nearly 38 percent in closed sales compared to a year ago, followed by Snohomish County with a 35 percent increase, prompting one MLS director to comment, “That is super amazing.”

You can almost hear the home salespeople high-fiving each other from here.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

Unfortunately for buyers, there’s still no good news on supply. Inventory is pitiful and shows no glimmer of getting any better soon. With inventory as low as it is and interest rates still so low, I’m actually surprised home prices are only up six percent from a year ago.

Here’s your closed sales yearly comparison chart:

Closed sales rose 12 percent from March to April. Last year they rose 14 percent over the same period.

Here’s the graph of inventory with each year overlaid on the same chart.

Inventory saw its biggest month-over-month increase since last May, up 10 percent from last month. However, year-over-year inventory is still down double digits, off 15 percent from a 2014.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

Both supply and demand inched slightly back toward buyers’ favor in April, but remain well in seller’s market territory.

Here’s the median home price YOY change graph:

Last month I said that I was “frankly shocked that this chart isn’t in the double digits.” Well, now it is. Sorry, buyers.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

The median home price shot up in April to just shy of the July 2007 peak. Remember that these values are not adjusted for inflation though. Maybe later this week I’ll post an inflation-adjusted version of this chart to see where we stand.

]]>http://seattlebubble.com/blog/2015/05/06/nwmls-king-county-home-prices-near-bubble-peak/feed/24http://seattlebubble.com/blog/2015/05/06/nwmls-king-county-home-prices-near-bubble-peak/KUOW Nails the Problem of Placing Blame for Rising Rentshttp://feedproxy.google.com/~r/SeattleBubble/~3/zYLASkzWwlE/
http://seattlebubble.com/blog/2015/05/04/kuow-nails-the-problem-of-placing-blame-for-rising-rents/#commentsMon, 04 May 2015 16:14:28 +0000http://seattlebubble.com/blog/?p=30581In March I wrote a post calling out people who blame investors for rising rents and unaffordable housing. Today I’d like to highlight some reporting that gets it right. This story by KUOW’s Joshua McNichols is a couple weeks old, but he hits the nail on the head, and I wanted to make sure it […]

Frustrated renters often blame developers. But the reality is more complicated…
…
The Summit Inn started out as housing for people with mental health problems. It morphed into an artists’ hub over time because of its former owner, Peter Sikov, whose motto was to “create places where things can happen.”
…
Rents at the Summit Inn stayed low because Sikov didn’t maintain the building much. Over time, it slid into disrepair.
…
Last year, the Seattle City Council passed a law requiring that all rentals meet a standard. Apartments would be subject to random inspections.

Sikov balked. And at the end of 2014, he sold the Summit Inn for twice what he paid in 1998.
…
That’s when Brad Padden entered the picture.

“We bought the building at today’s market rates,” Padden says. “There was no discount to us so that we could continue with that kind of patronage of the residents there.”

Padden and his business partner bought the building for almost $3 million.
…
“When you buy a $3 million building, and you put $2 million into it, you have to recoup those costs,” he says.

As Joshua points out, an investor can’t buy an apartment and increase the rents if the previous owner doesn’t first put it up for sale. If you insist on having someone to blame, perhaps you should be blaming the sellers, not the buyers.

]]>http://seattlebubble.com/blog/2015/05/04/kuow-nails-the-problem-of-placing-blame-for-rising-rents/feed/21http://seattlebubble.com/blog/2015/05/04/kuow-nails-the-problem-of-placing-blame-for-rising-rents/April Stats Preview: Surging Sales Editionhttp://feedproxy.google.com/~r/SeattleBubble/~3/iuY25UzJ1h4/
http://seattlebubble.com/blog/2015/05/01/april-stats-preview-surging-sales-edition/#commentsFri, 01 May 2015 17:02:18 +0000http://seattlebubble.com/blog/?p=30565With April 2015 now in the rear view mirror, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series: First, a tiny ray of good news… Listing inventory […]

]]>With April 2015 now in the rear view mirror, let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

First, a tiny ray of good news… Listing inventory did manage to increase slightly in both King and Snohomish. Meanwhile, sales also shot up in both counties as well. Year-over-year sales were up well into the double digits in both counties, while inventory was down double digits. Foreclosure notices declined yet again from 2014 in both counties.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

Sales in King County rose 14 percent between March and April (in 2014 they rose 20 percent over the same period), and were up 18 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Deeds in Snohomish shot up 20 percent month-over-month (vs. an 11 percent increase in the same period last year) and were up 19 percent from April 2014.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

Foreclosures in King County were down 27 percent from a year ago, but Snohomish County was only down 6 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

Trustee Deeds were down 53 percent from a year ago, falling to their lowest point since March 2008.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

Inventory managed meager increases in both counties month-over-month, which is actually surprising given how many sales we’re seeing. King is currently down 15 percent from last year and Snohomish is down 17 percent.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

]]>http://seattlebubble.com/blog/2015/05/01/april-stats-preview-surging-sales-edition/feed/24http://seattlebubble.com/blog/2015/05/01/april-stats-preview-surging-sales-edition/Case-Shiller Tiers: Low Tier Back to Double-Digit Gainshttp://feedproxy.google.com/~r/SeattleBubble/~3/_GFSSMOI52I/
http://seattlebubble.com/blog/2015/04/29/case-shiller-tiers-low-tier-back-to-double-digit-gains/#commentsWed, 29 Apr 2015 14:24:07 +0000http://seattlebubble.com/blog/?p=30555Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties. Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details […]

]]>Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

Low Tier: < $281,127 (up 0.2%)

Mid Tier: $281,127 – $447,173

Hi Tier: > $447,173 (up 0.2%)

First up is the straight graph of the index from January 2000 through February 2015.

Here’s a zoom-in, showing just the last year:

The middle tier actually fell just a tiny bit in February, but the low ans high tiers both saw big gains.

Between January and February, the low tier increased 1.3 percent, the middle tier fell less than 0.1 percent, and the high tier gained 1.4 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through February 2015.

Year-over-year price growth increased in the low and high tiers, but fell in the middle tier. Here’s where the tiers sit YOY as of February – Low: +11.0 percent, Med: +5.9 percent, Hi: +6.5 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Current standing is 18.9 percent off peak for the low tier, 14.3 percent off peak for the middle tier, and 8.2 percent off peak for the high tier.

]]>http://seattlebubble.com/blog/2015/04/29/case-shiller-tiers-low-tier-back-to-double-digit-gains/feed/16http://seattlebubble.com/blog/2015/04/29/case-shiller-tiers-low-tier-back-to-double-digit-gains/Case-Shiller: Seattle Home Prices Boosted in Februaryhttp://feedproxy.google.com/~r/SeattleBubble/~3/MddyhC801bs/
http://seattlebubble.com/blog/2015/04/28/case-shiller-seattle-home-prices-boosted-in-february/#commentsTue, 28 Apr 2015 17:24:01 +0000http://seattlebubble.com/blog/?p=30540Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to February data, Seattle-area home prices were: Up 0.9% January to February Up 7.1% YOY. Down 11.4% from the July 2007 peak Last year at this time prices rose 0.6% month-over-month and year-over-year prices were up 12.8%. Year-over-year price gains […]

Up 0.9% January to FebruaryUp 7.1% YOY.Down 11.4% from the July 2007 peak

Last year at this time prices rose 0.6% month-over-month and year-over-year prices were up 12.8%.

Year-over-year price gains edged up again in February with another big month-over-month gain as well.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities, in a Plot.ly chart since Tableau seems to have decided that the version I’m running is obsolete. You can still add or remove cities by clicking them on the left, or use the controls at the top right to zoom and scale.

Seattle’s position for month-over-month changes rose from #19 in January to #3 in February. Only San Francisco and Denver saw home prices increase more between January and February than they did in Seattle.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In February, four of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (one less than in January):

Here’s the interactive chart of the raw HPI for all twenty cities through February.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the ninety-one months since the price peak in Seattle prices have declined 11.4%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of February 2015, Seattle prices are still closest to where they were in March 2006.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

]]>http://seattlebubble.com/blog/2015/04/28/case-shiller-seattle-home-prices-boosted-in-february/feed/10http://seattlebubble.com/blog/2015/04/28/case-shiller-seattle-home-prices-boosted-in-february/Kiss Single-Family Homes Goodbye if Seattle Keeps Growinghttp://feedproxy.google.com/~r/SeattleBubble/~3/X4b1cMaov8w/
http://seattlebubble.com/blog/2015/04/24/kiss-single-family-homes-goodbye-if-seattle-keeps-growing/#commentsFri, 24 Apr 2015 17:56:44 +0000http://seattlebubble.com/blog/?p=30519We usually talk about the whole Seattle metro area on these pages, but I’d like to take a little while to discuss an issue that is most relevant to Seattle proper: Density. There’s no denying that Seattle has been booming lately, thanks largely to serious growth in the local tech economy—unbridled growth at Amazon, the […]

]]>We usually talk about the whole Seattle metro area on these pages, but I’d like to take a little while to discuss an issue that is most relevant to Seattle proper: Density.

There’s no denying that Seattle has been booming lately, thanks largely to serious growth in the local tech economy—unbridled growth at Amazon, the continued growth of local Silicon Valley outposts (e.g. Facebook, Google, etc.), and even the migration of large tech employers from other cities in the metro area into Seattle proper (e.g. Expedia)… you get the idea.

All of this adds up to the fastest population growth Seattle has seen since 1900-1910.

If Seattle’s population keeps growing, there is a hard housing reality that we’re going to have to face: the death of the single-family home.

As of 2013, roughly 43 percent of Seattle’s housing stock is made up of detached single-family homes. That’s already a minority, but if Seattle is going to be able to continue growing, that number is going to have to go a lot lower.

With 7,776 people per square mile, Seattle is currently the tenth most dense city in the country despite being only the twenty-second most populous. However, if Seattle is going to keep adding more people into the limited space we have available, we’re going to have to kiss an awful lot of our single-family housing goodbye.

No American city with 10,000 or more people per square mile has more than 25 percent of their housing as single-family. Here’s a look at population density versus single-family housing share for the 50 most populous cities in the United States:

If Seattle keeps adding people at the rate we’ve seen in the last few years, by 2030 the population will shoot up to around 900,000, equating to a density of 10,727 people per square mile. Even if none of the housing built to accommodate the population growth during that period is single-family homes, today’s single-family housing stock would still equate to roughly 31 percent of the total housing we’ll have in 2030.

I contend that this is not practically possible. Either Seattle’s population growth will dramatically slow down again in the near future, or we’re going to be tearing down a lot of single-family homes to make space for more townhomes and condos. Either way, it looks like the next ten years will be a very interesting time for Seattle.

]]>http://seattlebubble.com/blog/2015/04/24/kiss-single-family-homes-goodbye-if-seattle-keeps-growing/feed/68http://seattlebubble.com/blog/2015/04/24/kiss-single-family-homes-goodbye-if-seattle-keeps-growing/How Deep is the Current Listings Drought?http://feedproxy.google.com/~r/SeattleBubble/~3/2U90BzsmKGI/
http://seattlebubble.com/blog/2015/04/22/how-deep-is-the-current-listings-drought/#commentsWed, 22 Apr 2015 16:17:23 +0000http://seattlebubble.com/blog/?p=30510I thought it would be interesting to take a deeper look at the depth of the current listings drought by comparing monthly new listings over the last few years to the same period during the previous bubble (before listings began to increase in 2007). Here’s a view of the number of new single-family homes that […]

]]>I thought it would be interesting to take a deeper look at the depth of the current listings drought by comparing monthly new listings over the last few years to the same period during the previous bubble (before listings began to increase in 2007).

Here’s a view of the number of new single-family homes that were listed each month from 2013 through the present compared with the same month in the 2004-2006 timeframe:

Over the past 27 months, 25 percent fewer single-family homes have been listed than during the same months in the 2004 to 2006 period. Considering how tight the market was during the previous housing bubble, imagining it today with 25 percent fewer homes hitting the market each month is just nuts.

However, that’s only half of the picture. Let’s look at the other side of the supply and demand equation: closed sales.

Over the same period there have been an average of 22 percent fewer closed sales of single-family homes. This could be because there is still a lot less enthusiasm about homebuying today than there was at the height of the last housing bubble between 2004 and 2006, or it could be a direct consequence of the lower listing volume.

Either way, it’s clear that if we want to get anywhere close to a reasonable, non-bubbly market, we’re going to need a lot more listings.

]]>http://seattlebubble.com/blog/2015/04/22/how-deep-is-the-current-listings-drought/feed/78http://seattlebubble.com/blog/2015/04/22/how-deep-is-the-current-listings-drought/Warning: New Housing Bubble Aheadhttp://feedproxy.google.com/~r/SeattleBubble/~3/woubYtxy9UE/
http://seattlebubble.com/blog/2015/04/16/warning-new-housing-bubble-ahead/#commentsThu, 16 Apr 2015 16:32:51 +0000http://seattlebubble.com/blog/?p=30498This comment left by Ryan strikes me as a clear warning sign of another housing bubble inflating in Seattle. Just pulled the trigger on buying a townhouse in Fremont for $745k. Haven’t closed yet so don’t want to link to the MLS. Thought I would share my thinking on why I bought and what the […]

]]>This comment left by Ryan strikes me as a clear warning sign of another housing bubble inflating in Seattle.

Just pulled the trigger on buying a townhouse in Fremont for $745k. Haven’t closed yet so don’t want to link to the MLS. Thought I would share my thinking on why I bought and what the situation was like.

List was for around $650k. Property had multiple offers, most within a few $k of the accepted price. List to accepted offer in about 7 days. Three quarters of a mil for a townhouse seems insane but we feel good about the purchase for a few reasons:

My office is on the same block as the unit, can’t beat that commute

I’ve lived in Fremont for years and want to stay for the long haul both a resident and business owner

The unit was unusual in a number of ways, all good. Exceptional build quality

Units sold nearby with same square footage for similar price that are absolute garbage (3807 Fremont Ave N I’m looking at you)

We wanted a house but didn’t have the capital to buy and then remodel, most things in our geographic range needed work

I felt good about the potential future appreciation of the property due to being so close to all of the major tech employers

On the downside it’s definitely on the high end of what anyone paid for a townhouse in Fremont and there is no way around the fact that it’s insane amount of money. If tech is in a bubble it still feels like the early stages of the bubble and we didn’t see the situation improving. Mid term (5 year range) it seems that traffic will get drastically worse as everything under construction comes online, so it seemed smart to set up our lives not to have to leave the neighborhood.

Just one perspective from someone helping to inflate both the tech and housing bubble.

Here’s what concerns me the most:

$745k for a townhouse. In Fremont.

The home sold for $100k over list price with multiple offers at that level.

The buyer cites that he “felt good about the potential future appreciation” as partial justification for paying so much.

I still don’t think we’re likely to see another big price crash (yet) but stories like this one definitely scream “housing bubble” to me.

]]>It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. Figures just released for March show 11,408 pending sales during the month while only 10,505 sellers listed their homes for sale during the same period.
…
The multiple offer market has become commonplace on well-priced new listings, observed John Deely, principal managing broker at Coldwell Banker Bain. However, he cautioned, “Some sellers are pushing pricing boundaries and are not seeing the same action as their well-priced competition.”
…
Deely, a member of the Northwest MLS board of directors, said buyers are flooding into the Greater Seattle market due to abundant job opportunities. He also attributed the high demand to low interest rates and skyrocketing rents. “Some high demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” according to Deely.

Nothing like a little rent price scaremongering from a home salesman to kick us off.

Seattle Times

The median price of Seattle homes sold in March rose 18.9 percent over the year to $535,000 — the biggest jump in at least five years.

The number of available homes for sale has been at historic lows in recent months, helping drive up prices.
…
Multiple offers have become commonplace across the region because of the shortage of homes for sale. In March, King County had 1.3 months’ supply of homes, while Seattle had less than a one-month supply.
…
As the start of the spring season, March is typically a very good month for sales, Scott said. But coming out of a mild King County winter where sales didn’t slow down as they usually do, March’s sales have made the lack of inventory more severe.

It’s getting really old at this point, but the lack of inventory really is the main story in the Seattle housing market. Without more homes hitting the market we’re going to be stuck in this rut for a while.

Seattle P-I

As I mentioned yesterday, the P-I’s longtime real estate reporter Aubrey Cohen has moved on to another gig. While my opinion of the P-I has gone down dramatically ever since they dropped the print edition and basically became “Buzzfeed Light: Seattle Edition,” Aubrey always did great work there on the real estate beat. His efforts will be missed.

KING 5

Those are two descriptions about the current status of the Western Washington housing market given Monday by the Northwest Multiple Listing Service.
…
For those buyers who can’t win a bidding war, they’re left to try to find an affordable place to rent.

Good luck with that.

“Some high demand areas in Seattle have had a doubling of per bedroom rental rates to over $1,000 per bedroom,” said John Deely, a broker at Coldwell Banker Bain.

Puget Sound Business Journal

You may have hear that millennials don’t buy houses. The Great Recession and housing bubble scared them away.

For some, myself included, that’s true.

But for millennials who are watching their rents go up and up and up, buying a home is looking like a more attractive option.

Combine that with low interest rates and a flood of new people to the area, and you’ll see what’s currently playing out in Seattle.

I may have also heard that making generalizations about an entire group of people based on arbitrary birth year cutoffs is somewhat ridiculous. Or I may have said that. Just now. Articles about what “millennials” are or aren’t doing when it comes to buying homes are annoying and basically never insightful or interesting, in my opinion. Thankfully Ms. Parkhurst avoids falling too far into that trap, but she certainly skirted the edge.

Tacoma News Tribune / The Olympian

Prices are up, inventory is down and real estate officials seem stretched as they attempt to find the sturdiest metaphors to describe a sizzling seller’s market.
…
“The multiple-offer market has become commonplace on well-priced new listings,” said John Deely, principal managing broker at Coldwell Banker Bain, in a NWMLS release.

“Sellers are currently experiencing the role of Prince Charming as buyers vie to win the Cinderella title by escalating offer prices above market value, releasing earnest money and waiving contingencies normally used to safeguard the transaction,” he said.

]]>http://seattlebubble.com/blog/2015/04/08/march-reporting-roundup-anxious-frenzy-edition/feed/80http://seattlebubble.com/blog/2015/04/08/march-reporting-roundup-anxious-frenzy-edition/NWMLS: Home Prices & Sales Shot Up in March; Inventory Still Anemichttp://feedproxy.google.com/~r/SeattleBubble/~3/qfPRNd4C64Q/
http://seattlebubble.com/blog/2015/04/07/nwmls-home-prices-inventory-still-anemic/#commentsTue, 07 Apr 2015 15:54:43 +0000http://seattlebubble.com/blog/?p=30474March market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release. Frenzied Market Frustrating Buyers Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. […]

]]>March market stats were published by the NWMLS yesterday. Before we get into our monthly stats, here’s a quick look at their press release.

Frenzied Market Frustrating Buyers

Buyer anxiety is rising as the pace of home sales is faster than brokers are able to replenish inventory, according to members of Northwest Multiple Listing Service. Figures just released for March show 11,408 pending sales during the month while only 10,505 sellers listed their homes for sale during the same period.

“The frenzy market has returned and is in full bloom in King and Snohomish counties. Listings are selling as soon as they come on the market for sale,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.
…
This market is pushing buyers beyond their comfort level, suggested Northwest MLS director Frank Wilson, the branch managing broker at John L. Scott, Inc. Poulsbo. “They’re being asked to write offers faster, for more money and with less help from the seller and the result is stress. Multiple offers only add to their stress.”

Some of the agents quoted in the release actually sound concerned for buyers, which is quite a different tone than the jubilant rah-rah releases we saw during the last housing bubble. Lennox Scott still sounds pumped up, though.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

Unfortunately for buyers, there’s still no good news on supply. Inventory is pitiful and shows no glimmer of getting any better soon. With inventory as low as it is and interest rates still so low, I’m actually surprised home prices are only up six percent from a year ago.

Here’s your closed sales yearly comparison chart:

Closed sales rose 51 percent from February to March. Last year they rose 43 percent over the same period.

Here’s the graph of inventory with each year overlaid on the same chart.

Inventory barely creeped up from February to March. Year-over-year inventory fell to its lowest point since June 2013.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

Both supply and demand continued to move further in sellers’ favor in March.

Here’s the median home price YOY change graph:

Like I said, I’m frankly shocked that this chart isn’t in the double digits.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

Home prices are floating along only a little lower than the peak year in 2007. Of course these values are not adjusted for inflation, so in real terms we’re not as close to the peak as it appears.

February 2015: $440,250
October 2006: $440,000

Here’s this month’s article from the Seattle Times. Aubrey Cohen has finally moved on from his long stint as the real estate reporter at the Seattle P-I, so I don’t expect to see any more real estate news coverage from them. The topic just isn’t click-baity enough for their current business model.

]]>http://seattlebubble.com/blog/2015/04/07/nwmls-home-prices-inventory-still-anemic/feed/5http://seattlebubble.com/blog/2015/04/07/nwmls-home-prices-inventory-still-anemic/Case-Shiller: Home Prices Slipped Just Slightly in Januaryhttp://feedproxy.google.com/~r/SeattleBubble/~3/YrXLh3xB9Wc/
http://seattlebubble.com/blog/2015/04/06/case-shiller-home-prices-slipped-just-slightly-in-january/#commentsTue, 07 Apr 2015 00:37:42 +0000http://seattlebubble.com/blog/?p=30460Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to January data, Seattle-area home prices were: Down 0.5% December to January Up 6.8% YOY. Down 12.2% from the July 2007 peak Last year at this time prices fell 0.8% month-over-month and year-over-year prices were up 11.9%. Year-over-year price gains […]

Down 0.5% December to JanuaryUp 6.8% YOY.Down 12.2% from the July 2007 peak

Last year at this time prices fell 0.8% month-over-month and year-over-year prices were up 11.9%.

Year-over-year price gains edged up in January despite prices falling month-over-month, since they fell less this year than last. In 2013 prices peaked in September and had fallen 1.7 percent by the following January. In 2014 prices peaked in July, and had declined by 1.2 percent as of January.

Here’s an interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities, courtesy of Tableau Software (check and un-check the boxes on the right):

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

In the ninety months since the price peak in Seattle prices have declined 12.2%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of January 2015, Seattle prices are still closest to where they were in March 2006.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

Next, let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

Low Tier: < $280,516 (down 1.0%)

Mid Tier: $280,516 – $446,188

Hi Tier: > $446,188 (down 1.0%)

First up is the straight graph of the index from January 2000 through January 2015.

Here’s a zoom-in, showing just the last year:

The middle tier lost the most ground month-over-month in January, as the high tier marked its sixth month of declines in a row.

Between December and January, the low tier decreased 0.2%, the middle tier fell 0.6%, and the high tier lost 0.5%.

Here’s a chart of the year-over-year change in the index from January 2003 through January 2015.

Year-over-year price growth increased in the low and middle tiers, but fell in the high tier. Here’s where the tiers sit YOY as of January – Low: +9.5%, Med: +6.4%, Hi: +6.2%.

Lastly, here’s a decline-from-peak graph like the one posted earlier this week, but looking only at the Seattle tiers.

Current standing is 19.9% off peak for the low tier, 14.2% off peak for the middle tier, and 9.4% off peak for the high tier.

]]>http://seattlebubble.com/blog/2015/04/06/case-shiller-home-prices-slipped-just-slightly-in-january/feed/2http://seattlebubble.com/blog/2015/04/06/case-shiller-home-prices-slipped-just-slightly-in-january/Housing Bubble 2.0: The Perma-Bears Respondhttp://feedproxy.google.com/~r/SeattleBubble/~3/lIG1p09hbZE/
http://seattlebubble.com/blog/2015/04/01/housing-bubble-2-0-the-perma-bears-respond/#commentsWed, 01 Apr 2015 20:00:50 +0000http://seattlebubble.com/blog/?p=30446Ben Jones, who has been blogging about the housing bubble from down in Arizona since late 2004 at The Housing Bubble Blog linked to my “Welcome to Housing Bubble 2.0” post yesterday, prompting an interesting discussion in the comments. Here’s a selection from the conversation that ensued: Comment by Ben Jones I’ve called this the […]

I’ve called this the ‘it’s not 2000-pick your year’ excuse. Sure, house prices are up up UP! There are people camping out for pre-construction houses, multiple offers over asking, investors running wild. Shortages, man, shortages! But; there are not the exact circumstances of the pick your year.

The bubble is in the minds of the participants, and it couldn’t be more clear. All the proof you need is in the prices. It doesn’t matter how you get there.

I disagree with the premise that “all the proof you need is in the prices.” If that were true, then New York and San Francisco have basically been in a perpetual housing
bubble since the middle of the twentieth century. There is a lot more to recognizing a housing bubble than just the prices.

Comment by bink

“more all-cash buyers, almost no zero-down buyers”

Since home price increases aren’t being built on top of suicidal financing like last time, we’re not likely to see a dramatic burst when things finally slow down.

So he thinks that those all-cash buyers will just sit things out instead of stampeding towards the exits like a stock market crash? At least with mortgages the home owners can’t just liquidate. They need to find a new place to live. “Investors” do not.

First, many all-cash buyers are purchasing a home to live in themselves, not as an investment. Those buyers would have no reason to “stampede toward the exits” if the housing market were to soften again.

As for investors, the only reason they would be looking for a way out would be if rents were to also take a dive, which is only likely in the case of another overall economic crash. I’m not saying that we definitely won’t see another economic crash, but if we do, where would these investors be moving their cash to? Certainly not back in the stock market…

Comment by sleepless_near_seattle

From the comments:

“Something else that’s different this time around is that the price to own has not diverged as much from rents. Rents have been growing at double digit rates in neighborhoods near downtown Seattle like Capitol Hill for a couple years now. During the last boom, home prices were about the same but I’d guess rents were 60-70% of what they are now.”

Doesn’t this scream out to anyone that we are in a much worse bubble than we were 10 (wow, has it been that long?) years ago?

Comment by Rental Watch

Doesn’t it scream that we have a shortage of supply?

If both rents AND homes prices are going up substantially faster than inflation or wages, doesn’t that seem to be evidence that there is not sufficient supply of any type of housing?

Comment by sleepless_near_seattle

I don’t know for sure. What I do know is that I’ve started writing letters to “owners” of vacant houses in Portland. What I’m finding is that they are everywhere if you look closely, here in a supposedly low inventory, “everyone is moving there” city.

I would love to see some actual data on these supposedly empty homes that are “everywhere.” I realize the commenter was talking about Portland, but this is the same old discredited “shadow inventory” myth that perma-bears have been clinging to for years. If you had a vacant house to sell right now, what possible rational reason would you have not to sell it in this market?

It’s difficult to understand where we are with the global housing bubble, because the media ignore it. So anyone interested has to glean what they can from various sources. IMO, many countries or entire regions are either at all time highs, or just barely off the peak. I don’t have time or space to post them all…

I read the NAR economists saying prices were up in the US in almost every state. I don’t know about that, but even if it’s true, they are up in Jakarta too. So what? What should matter is are house prices too high. Are lending standards where they need to be. Again, if ‘affordability is at an all time high’ as the NAR says, how come the govt is doing all the lending at under 4% with little to nothing down?

I don’t see how this situation isn’t ringing alarm bells around the world. I guess it is, but not many are listening.

The focus of Ben’s blog is typically on the “global housing bubble,” which he seems to believe is still going strong. I’m not making any particular claims about anything global since the focus of my blog is local, but I do try to do my best to stay aware of what’s going on in the big picture.

To reiterate my point, I do think we are currently in the beginning stages of another housing bubble. However, I think that it is building up very differently than the one that inflated 2004-2007, and will therefore have a very different outcome than the last one. I don’t yet know what that will look like (no one does), but I strongly suspect it will not include a dramatic increase in inventory, a flood of foreclosures, and rapid decreases in home prices.

]]>http://seattlebubble.com/blog/2015/04/01/housing-bubble-2-0-the-perma-bears-respond/feed/42http://seattlebubble.com/blog/2015/04/01/housing-bubble-2-0-the-perma-bears-respond/Welcome to Housing Bubble 2.0http://feedproxy.google.com/~r/SeattleBubble/~3/7u02ItkjpHs/
http://seattlebubble.com/blog/2015/03/30/welcome-to-housing-bubble-2-0/#commentsMon, 30 Mar 2015 14:33:38 +0000http://seattlebubble.com/blog/?p=30431With home prices nearing their 2007 peak levels in the Seattle area (and no doubt exceeding them in some neighborhoods), I thought it would be good to step back from the monthly stats and take a big picture look at what's going on in the housing market.

To answer the question of whether or not we are in another bubble, let's compare and contrast the present frenzy to what the housing market went through during the Great Housing Bubble...

]]>With home prices nearing their 2007 peak levels in the Seattle area (and no doubt exceeding them in some neighborhoods), I thought it would be good to step back from the monthly stats and take a big picture look at what’s going on in the housing market.

To answer the question of whether or not we are in another bubble, let’s compare and contrast the present frenzy to what the housing market went through during the Great Housing Bubble.

What’s The Same This Time

home prices rising at double-digit rates year-over-year

low inventory

homes sell fast & for over asking

stock market hitting new all-time highs

low interest rates

What’s Different This Time

more all-cash buyers, almost no zero-down buyers

no crazy loans (neg-am, fog-a-mirror, interest-only, etc.)

home price to income & price to rent ratios not as far out of whack

overall economy still on relatively weak footing (e.g. GDP)

interest rates at rock-bottom

affordability index not as low (thanks to low rates)

buyers are typically more cautious, e.g. not likely to waive inspection

builders focusing on rentals, few SFH & condos being built

less cheerleading from media & home salespeople

The net result of all this is a market that may be in early stages of another housing bubble, but it feels different, and it’s not likely to end the same way as the last one.

This time around it seems like rather than “fear of missing out,” home buyers are just frustrated and tired.

Since home price increases aren’t being built on top of suicidal financing like last time, we’re not likely to see a dramatic burst when things finally slow down. However, since interest rates have been so ridiculously low for so long now, it is likely home prices will be more sensitive to the inevitable borrowing rate increase when it does come.

Over the next month I’ll be posting some detailed, data-backed looks into some of the topics listed above. Let me know if there’s a particular item of interest to you.

]]>http://seattlebubble.com/blog/2015/03/30/welcome-to-housing-bubble-2-0/feed/39http://seattlebubble.com/blog/2015/03/30/welcome-to-housing-bubble-2-0/Don’t Blame Investors For Unaffordable Housinghttp://feedproxy.google.com/~r/SeattleBubble/~3/NmwXfZysWi0/
http://seattlebubble.com/blog/2015/03/27/dont-blame-investors-for-unaffordable-housing/#commentsFri, 27 Mar 2015 23:17:59 +0000http://seattlebubble.com/blog/?p=30434An article published this week in Seattle Weekly titled A Letter to the Investor Buying Our Apartment Building pinned the blame for the lack of affordable housing in the Seattle area on investors and their dirty obsession with profits.

...Eve and Charles told us they were putting the property up for sale. Who could blame them? The building is a century old and so much work went into maintaining it, especially for a couple of people who, also, are aging. But it’s prime real estate, right on the water with a view that would make even Donald Trump drool. So we had a good idea of what would happen after the sale went through. Skyrocketing rents and a landlord we’d never see, much less ever know...

…Eve and Charles told us they were putting the property up for sale. Who could blame them? The building is a century old and so much work went into maintaining it, especially for a couple of people who, also, are aging. But it’s prime real estate, right on the water with a view that would make even Donald Trump drool. So we had a good idea of what would happen after the sale went through. Skyrocketing rents and a landlord we’d never see, much less ever know.
…
No one begrudges your interest in a profit. After all, spending millions on a building is no small thing; you should indeed expect a sound return on your investment. But if that means that low-income, older tenants who have lived in the same place for decades must leave their homes, and likely their city, in search of affordable rents, then let’s be honest. You aren’t just in the real-estate business. You’re in the business of creating unaffordable housing.

Yes, it is sad that the long-time tenants of this apartment will need to move. No, it is not the investor’s fault. If you must assign blame, point the finger at basic supply and demand.

On the supply side, building policy in the Seattle area makes new construction expensive, time-consuming, complex, and in some places thanks to restrictive zoning and height restrictions, downright impossible.